If the Quantity of Cookies Purchased Decreases by 30 Percent

question 123

Multiple Choice

If the quantity of cookies purchased decreases by 30 percent as the result of a 15 percent increase in the price of oranges, the absolute value of the price elasticity of demand for cookies is

• A) 0.25.
• B) 0.50.
• C) 1.25.
• D) 2.0.

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Definitions:

Demand Constraint

A limitation in mathematical models of supply and demand that restricts the quantity of goods or services that can be offered or demanded.

Minnesota

A state in the northern United States, known for its lakes and forests, and also as the Land of 10,000 Lakes.

Equality

The state or condition of being equal, especially in status, rights, or opportunities.

Capacity Constraint

Limitations on the production capacity of a manufacturing plant, company, or economy, which can affect supply and pricing.