If the Price of a Soda Is $1 and the Price

question 45

Multiple Choice

If the price of a soda is $1 and the price of a sub sandwich is $5,the relative price of a sub sandwich is ________ because ________.

• A) 5 sodas; it costs 5 sodas to buy a sub
• B) $5; 5 sodas will cost $5
• C) 20 cents; $1 divided by $5 is 20 cents
• D) 1/5; a sub costs 1/5 of a soda
• E) None of the above answers is correct.

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Definitions:

Perfectly Elastic

Describes a situation where the quantity demanded or supplied responds infinitely or extremely to changes in price.

Highly Inelastic

Describes demand that is hardly responsive to changes in price, typically for necessities where consumption does not decrease significantly with a price increase.

Total Profit

The overall financial gain made by a business after subtracting all expenses from total revenue.

Graph

A diagram representing a system of connections or interrelations among two or more things by a number of distinctive dots, lines, bars, etc.