If the Quantity of Oranges Purchased Decreases by 30 Percent

question 20

Multiple Choice

If the quantity of oranges purchased decreases by 30 percent as the result of a 15 percent increase in the price of oranges, the price elasticity of demand for oranges is

• A) − 0.25.
• B) − 0.50.
• C) − 1.25.
• D) − 2.

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Definitions:

Price Index

A measure that examines the average change in prices of goods and services over time in an economy.

Dollar-Value LIFO

An inventory valuation method that uses the last-in-first-out (LIFO) principle, adjusted for changes in the dollar's value, to account for inflation.

Year-End Price

The final market price of a security or an asset on the last trading day of the fiscal year.

Price Index

A statistical measure that examines the weighted average of prices of a basket of consumer goods and services, indicating cost of living changes over time.