Using the Midpoint Method,the Price Elasticity of Demand for a Good

question 48

Multiple Choice

Using the midpoint method,the price elasticity of demand for a good is computed to be approximately 2.Which of the following events is consistent with a 0.1 percent increase in the price of the good?

• A)The quantity of the good demanded decreases from 250 to 150.
• B)The quantity of the good demanded decreases from 200 to 100.
• C)The quantity of the good demanded decreases by 0.05 percent.
• D)The quantity of the good demanded decreases by 0.2 percent.

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Definitions:

Need-Satisfying Benefits

Need-satisfying benefits are aspects of a product or service that fulfill explicit or implicit needs of the consumer, contributing to its perceived value.

Distribution Outlets

Points of sale or channels through which products are made available to customers.

Need-Satisfying Benefits

The advantages or positive outcomes that a product or service provides to fulfill the specific needs of a customer.

Information Overload

The state of being overwhelmed by the vast amount of information available, making it difficult to make decisions or focus effectively.