When the Price of Pens Went from $1 to $1

question 31

Multiple Choice

When the price of pens went from $1 to $1.50, the quantity demanded of pencils changed from 50 to 75 a day. The cross-price elasticity of demand for pencils (using the initial value formula) is

• A) 1.
• B) 0.4.
• C) 0.2.
• D) -0.2.

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Definitions:

Revenue Function

A function that calculates the total money earned from sales, providing a relationship between quantity sold and the revenue generated.

Graph Shape

The visual representation or silhouette of data on a graph, which can indicate patterns, trends, or distributions in the data.

Corporation

A business organization that is owned by one person or group of people, in which the owner has limited liability in the business, and therefore, is not personally liable.

Closing

A meeting attended by a buyer, seller, attorneys, and a representative of a lending institution for the official sale of a property.