-The Above Figure Illustrates the Demand for Hamburgers

question 34

Multiple Choice

-The above figure illustrates the demand for hamburgers. When the price is $1 a hamburger, the elasticity of demand is _______ and a 1 per cent increase in the price will _______ the quantity of hamburgers demanded by _______ per cent.

• A) 1.00; decrease; 0.40
• B) 2.50; increase; 2.50
• C) 5.00; decrease; 5.00
• D) 0.40; decrease; 0.40

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Definitions:

Least Possible Cost

The minimum expenditure necessary to achieve a specific outcome or produce a given quantity of a good.

Input Markets

Marketplaces where firms buy resources, goods, and services necessary for producing their own products or services.

Output Markets

Markets where goods and services produced by businesses are sold to households, government entities, and other businesses.

General Equilibrium

A state in which all markets in an economy are in simultaneous equilibrium, taking into account the interactions between different markets.