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:

Lead Indicator

A predictive metric that anticipates future economic or business trends.

Customer Satisfaction

The measure of how products or services supplied by a company meet or surpass customer expectations.

New Passengers

Individuals who are utilizing a transportation service for the first time.

Bus Accidents

Incidents involving a collision or crash of a bus vehicle, leading to damage, injury, or loss of life.