The Figure Above Shows the Supply Curve for Roses

question 155

Multiple Choice

The figure above shows the supply curve for roses.
-Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500.Using the midpoint method,the elasticity of demand equals

• A) 2.10.
• B) 1.11.
• C) 0.90.
• D) 0.72.
• E) None of the above answers is correct.

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Definitions:

Capital Structure

The mixture of debt and equity financing that a company uses to fund its operations and growth.

Residual Dividend

A policy under which a company pays dividends to its shareholders only after all its capital needs are met for a particular period.

Compromise Dividend

A dividend payment agreed upon by a company and its shareholders to be distributed, usually under circumstances where the payment amount may not meet all parties’ expectations but is deemed acceptable.