Refer to the Accompanying Graph

question 102

Multiple Choice

Refer to the accompanying graph. What is the price elasticity of demand when the price of rice is $3 per pound?

• A)0.5
• B)0.67
• C)0.75

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Definitions:

Maquiladoras

Factories in Mexico, typically owned by foreign companies, that import raw materials and produce goods for export, benefiting from lower labor costs.

Manufacturing Plants

Facilities where raw materials are transformed into finished goods through various processes and machinery.

Duty-Free

A retail environment where goods are sold to international travelers without the inclusion of certain local or national taxes and duties.

Central-Planning Economy

An economic system where the government or central authority makes all decisions regarding the production and distribution of goods and services.