If the Price Elasticity of Demand for Canned Soup Is

question 126

Multiple Choice

If the price elasticity of demand for canned soup is estimated at -1.62.What happens to sales revenue if the price of canned soup rises?

• A)It falls by 162 percent.
• B)It rises by 1.62 percent.
• C)It falls.
• D)It rises.

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Definitions:

Wheat

A cereal grain that is a staple food in many parts of the world, used to make products like bread, pasta, and pastry.

Monopolistically Competitive

Describes a market structure in which many firms sell products that are similar but not identical, allowing for some degree of market power.

Market Structure

The organization and characteristics of a market, including the number and size of sellers, product differentiation, and ease of entry and exit.

Monopolistic Competition

A market structure in which many firms sell products that are similar but not identical.