When the Price of a Cup of Coffee Falls from $3.00

question 53

Multiple Choice

When the price of a cup of coffee falls from $3.00 to $2.50, the quantity demanded increases from 1,000 per month to 1,150 per month. Using the midpoint method, the price elasticity of demand is

• A) 0.77.
• B) 1.30.
• C) 0.07.
• D) 2.50.
• E) 3.00.

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Definitions:

Standard Errors

Measures of the variability or spread of a sample statistic distribution if the experiment were to be repeated many times.

Control Limits

The boundaries in statistical process control that indicate the acceptable range of process variation.

Sample Mean

The average of a sample set of numbers, calculated as the sum of all the observed values divided by the number of observations.

Trend

The prevailing trend or the way in which something is evolving or transforming with the passage of time.