The Quantity Demanded Increases from 20 to 30 Units as the Price

question 1

Multiple Choice

The quantity demanded increases from 20 to 30 units as the price falls from 50 to 40.What is the price elasticity of demand using the arc (or midpoint) method?

• A)-1/5
• B)-9
• C)-1/2
• D)-9/5
• E)None

---

Definitions:

Average Operating Assets

This refers to the average value of the assets used in operations over a certain period, which can indicate the efficiency of asset use in generating income.

Sales

The revenue generated from the selling of goods or services by a company or an enterprise to its customers.

Turnover

Sales divided by average operating assets.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, expressed as a percentage.