Using the Midpoint Method,the Price Elasticity of Demand for a Good

question 201

Multiple Choice

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 0.78.Which of the following events is consistent with a 4.68 percent decrease in the quantity of the good demanded?

• A)a 3.65 increase in the price of the good
• B)a 16.67 percent increase in the price of the good
• C)an increase in the price of the good from $48.00 to $50.97
• D)an increase in the price of the good from $65.00 to $66.98

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Definitions:

Cash Reserves

Funds that a company or individual keeps on hand to meet short-term and emergency funding requirements.

Reorganization

A comprehensive restructuring of a company's business, legal, or ownership structure, often aimed at improving profitability or efficiency.

Interest Earned

The income received from investments in securities such as savings accounts, certificates of deposit (CDs), bonds, or loans.