A Sporting Goods Store Observes That as They Reduce the Price

question 76

Multiple Choice

A sporting goods store observes that as they reduce the price of squash balls from $5 to $4, their quantity demanded rises from 200 to 220. Rounding to the nearest tenth, they correctly compute the elasticity of demand of squash balls to be:

• A) 0.1.
• B) 0.4.
• C) 2.3.
• D) 5.

---

Definitions:

Debt Financing

The raising of capital through borrowing money that must be repaid over time, usually with interest.

Business Plan

A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals.