Suppose a Factory Is Producing 100 Units and the Price

question 32

Multiple Choice

Suppose a factory is producing 100 units and the price of each unit is $10.If raising the price to $12 per unit results in a drop in sales of 12 units,what is the price elasticity of demand,η?

• A)6
• B)0.6
• C)1.67
• D)0.8
• E)0.17

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Definitions:

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