Suppose That the Quantity of a Good Demanded Rises from 90

question 50

Multiple Choice

Suppose that the quantity of a good demanded rises from 90 units to 110 units when the price falls from $1.20 to 80 cents per unit.The price elasticity of demand for this product is

• A)0.5.
• B)1.0.
• C)1.5.
• D)2.0.
• E)4.0.

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Definitions:

Break-Even Point

The financial point at which total revenues equal total costs, resulting in no net profit or loss.

Variable Costs

Charges that directly correlate with the volume of production or sales, such as direct labor and materials required for production.

Fixed Costs

These are business expenses that remain the same regardless of the level of production or sales, such as rent or salaries.

Break-Even Point

The level of sales at which total revenues equal total expenses, resulting in neither profit nor loss.