Suppose That the Price of Product B Increases from $10

question 40

Multiple Choice

Suppose that the price of product B increases from $10 to $15 and, in response, quantity demanded declines from 100 to 80. Using the midpoint formula, what is the elasticity of demand?

• A)2.5
• B)1.33
• C)0.4
• D)0.56
• E)0.75

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Definitions:

Private Ownership

refers to properties or businesses owned by individuals or corporations rather than by the government or the public sector.

Private Sector

The part of the economy that is run by individuals and companies for profit and is not controlled by the government.

Publicly-Owned Enterprises

Businesses that are owned by the government and operated for the benefit of the general public.

State-Owned Enterprises

Businesses that are owned and operated by government entities, aimed at providing public services or promoting economic activities.