Figure 5-14 -Refer to Figure 5-14.Using the Midpoint Method,what Is the Price

question 81

Multiple Choice

Figure 5-14
-Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $4 and $6?

• A) 0.75
• B) 1.00
• C) 1.20
• D) 1.25

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Consumer Surplus

The gap between what consumers are prepared and can afford to pay for a product or service versus what they end up paying.

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved in a market.

Sales Tax

A tax imposed by a government on sales of goods and services, typically calculated as a percentage of the sale price.