If the Cost of Food & Beverages Increases by 10

question 176

Multiple Choice

If the cost of food & beverages increases by 10 percent,then,other things the same,the CPI is likely to increase by about

• A)1.5 percent.
• B)7.5 percent.
• C)10 percent.
• D)20 percent.

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Definitions:

Midpoint Formula

A method used in economics and mathematics to calculate the average rate of change or percentage change between two points on a line or curve.

Supply Elasticity

Measures the responsiveness of quantity supplied to a change in the price of a good or service.

Total Revenue

The overall amount of money generated by a firm from its sales activities before any costs or expenses are subtracted.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price; high elasticity indicates a significant response, while low elasticity indicates little to no response.