Suppose That at a Price of €30 Per Month, There

question 58

Multiple Choice

Suppose that at a price of €30 per month, there are 30,000 subscribers to cable television in Small Town. If Small Town Cablevision raises its price to €40 per month, the number of subscribers will fall to 20,000. Using the midpoint method for calculating the elasticity, what is the price elasticity of demand for cable TV in Small Town?

• A) 1.4
• B) 0.66
• C) 0.75
• D) 2.0
• E) 1.0

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Definitions:

Benjamin Whorf

An American linguist known for his hypothesis that the structure of a language affects its speakers' cognition and worldview.

Allen Gardner

An American psychologist known for his work in teaching sign language to chimpanzees, notably a chimp named Washoe.

Beatrix Gardner

A psychologist known for her work with sign language in non-human primates, particularly with a chimpanzee named Washoe.

David Premack

A psychologist known for the Premack Principle, which suggests that more probable behaviors can reinforce less probable behaviors.