If the Price Elasticity of Demand for Radios Is 2

question 111

Multiple Choice

If the price elasticity of demand for radios is 2.5 (dropping the minus sign) , then a 50 percent reduction in the price of radios will lead to

• A)the sale of 200 additional radios.
• B)the sale of 125 percent more radios than before.
• C)the sale of 150 percent more radios than before.
• D)the sale of 25 percent more radios than before.

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Definitions:

Simple Interest

A method of calculating the interest charge on a loan or financial product based on the original principal amount and the rate of interest over a specific time period, without compounding.

Interest on Interest

Earnings from reinvesting the interest received from an investment, leading to exponential growth over time.

Annually

Concerning an event that takes place annually.

Simple Interest

Interest calculated only on the principal amount, or on that portion of the principal amount that remains unpaid, not including interest on interest.