Suppose the Price of a Cookie Is $2

question 46

Multiple Choice

Suppose the price of a cookie is $2.50 and the quantity demanded is 50. When the price drops to $1, the quantity demanded increases to 200. Using the midpoint method, what is the price elasticity of demand?

• A) −1.40
• B) −0.72
• C) −140
• D) −7.2

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Definitions:

Franchisor

A franchisor is a company that grants an individual or group the rights to run a business location using its brand, business model, and guidelines.

Franchisee

An individual or company that is granted the right by a franchisor to do business under a recognized brand name and operational system.

Logistics Management

The administration of the flow of goods between the point of origin and the point of consumption to meet customer or corporation requirements.

Flow

In psychology and user experience, a state where people are fully immersed and focused on what they are doing.