If the Price of Corn Chips Increases from $2

question 80

Multiple Choice

If the price of corn chips increases from $2.00 per bag to $3.00 per bag and the quantity demanded goes down from 100 million bags per week to 50 million bags per week, the absolute value of price elasticity of demand in that price range is

• A) 0.50.
• B) 1.67.
• C) 0.93.
• D) 2.33.

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Definitions:

Diseconomies of Scale

The scenario where costs start increasing as a company or project becomes too large, leading to inefficiency.

Bureaucratic

Relating to a system of government in which most of the important decisions are made by state officials rather than by elected representatives.

Large Management

Refers to the administration and execution of strategic objectives within large organizations, involving complex structures and substantial resource allocation.

Increasing Returns

The phenomenon where an increase in the scale of production leads to a proportionally larger increase in output.