Suppose the Price of Mascara Is $12 and the Quantity

question 77

Multiple Choice

Suppose the price of mascara is $12 and the quantity demanded is 450. When the price drops to $8, the quantity demanded increases to 550. Using the mid-point method, what is the price elasticity of demand?

• A) −0.5
• B) −2.0
• C) −55
• D) −180

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Definitions:

Need

A basic requirement or necessity that motivates behavior towards its satisfaction.

Want

A desire or wish for something that is not necessarily needed but is desired by an individual.

Stimulus-Response Model

A concept in psychology and marketing that suggests a direct link between an external stimulus and a predictable response from an organism or individual.

Buyer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts these processes have on the consumer and society.