Recall the Application About How Changes in Demand Affect the Price

question 19

Multiple Choice

Recall the Application about how changes in demand affect the price of milk to answer the following question(s) .
-According to the Application, the price elasticity of demand for milk is -0.20 and the short-run price elasticity of supply for milk is 0.10. If the demand for milk decreases by 6 percent, the equilibrium price of milk will _______ in the short run.

• A)increase by 6 percent
• B)decrease by 20 percent
• C)increase by 18 percent
• D)decrease by 12 percent

---

Definitions:

Book Of Final Entry

Book that receives information about business transactions from a book of original entry (a journal). Example: a ledger.

Trial Balance

An accounting report that lists the balances of all ledgers accounts to ensure that total debits equal total credits.

Accounts Payable

Short-term liabilities of a business that represent amounts owed to creditors for goods and services purchased on credit.

Fees Earned

Income received or earned for services provided.