Using Average Price and Average Quantity, Calculate the Price Elasticity

question 438

Multiple Choice

Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals

• A) 2.5.
• B) 1.29.
• C) 0.78.
• D) 0.06

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Definitions:

Cross-cultural Study

A research methodology that compares cultural factors across different societies to understand their influence on human behavior and attitudes.

Longitudinal Study

A study framework that repeatedly examines the same variables (for example, individuals) across short or extended time frames.

Triple-blind Study

A study design in which the participants, the people administering the treatments, and the researchers analyzing the results are unaware of who is receiving the treatment and who is receiving the placebo.

Population Study

Research conducted on a large group of individuals aimed at understanding the prevalence, incidence, or experience of a particular condition or characteristic within that population.