When the Local Used Bookstore Prices Economics Books at $100

question 11

Multiple Choice

When the local used bookstore prices economics books at $100 each,they generally sell 70 per month.If they lower the price to $70 each,they sell 90.Given this,what is the elasticity of demand for economics books,and what action should the store take

• A)2.91; the store should lower prices to raise total revenue.
• B)2.91; the store should raise prices to raise total revenue.
• C)0.714; the store should lower prices to raise total revenue.
• D)0.714; the store should raise prices to raise total revenue.

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Definitions:

Correlation

A statistical measure that describes the extent to which two variables move in relation to each other.

Linear Relationship

A correlation between two variables where the change in one variable is proportional to the change in another.

Coefficient Of Skewness

A statistical measure that describes the asymmetry of the distribution of values in a data set around its mean.

Asymmetry

A situation where data or a distribution does not show symmetry and has one side that is different in shape or length from the other.