Suppose a Fast-Food Chain Determines That the Price Elasticity of Demand

question 38

Multiple Choice

Suppose a fast-food chain determines that the price elasticity of demand for its hamburgers is 1.7,and the price of the hamburger is currently $4.00.What will be the effect on quantity demanded and total expenditure on this chain's hamburgers if the price is increased to $6.00?

• A)Quantity demanded will fall by 68% and total expenditure will decrease.
• B)Quantity demanded will fall by 11.76% and total expenditure will decrease.
• C)Quantity demanded will fall by 17% and total expenditure will increase.
• D)Quantity demanded will fall by 1.7% and total expenditure will increase.
• E)Quantity demanded will fall by 34% and total expenditure will decrease.

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Definitions:

Arthropoda

A phylum of invertebrate animals that includes insects, arachnids, myriapods, and crustaceans, characterized by an exoskeleton, segmented body, and jointed appendages.

Jointed Appendages

Jointed appendages are limbs or structures that are segmented and connected by joints, allowing for a range of movements, characteristic of arthropods.

Nervous System

The network of nerve cells and fibers that transmits signals between parts of the body, coordinating actions and sensory information.

Flatworms

A phylum of simple, soft-bodied invertebrate animals known for their bilateral symmetry and lack of a body cavity.