Suppose You Are the Manager of a Local Water Company

question 92

Multiple Choice

Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption by 10 percent. If the price elasticity of demand for water is −.25, by how much would you have to raise the price of water?

• A) 10 percent
• B) 25 percent
• C) 40 percent
• D) 100 percent

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Definitions:

Freely Available

Resources, information, or products that can be accessed or obtained without any payment or restrictions.

Economic Choice

Economic choice involves making decisions on the allocation of scarce resources among competing needs or desires to maximize benefits and utility.

Competitive Behavior

Actions taken by companies aimed at gaining an advantage over their rivals in the market, often through price adjustments, product innovations, and marketing strategies.