The Inverse Demand Function for Grapes Is Described by the Equation

question 34

Multiple Choice

The inverse demand function for grapes is described by the equation p = 518 - 5q, where p is the price in dollars per crate and q is the number of crates of grapes demanded per week. When p = $38 per crate, what is the price elasticity of demand for grapes?

• A) -190/60
• B) -5/518
• C) -5/95
• D) -96/38
• E) -38/480

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Definitions:

Pure Competition

A market structure characterized by a large number of small firms producing identical products, with no single firm able to influence the market price.

Commodity Products

Basic, undifferentiated products or raw materials that are interchangeable with others of the same type.

Agribusinesses

Companies involved in the agricultural industry, dealing with the production, processing, and distribution of agricultural products.

Pure Monopoly

A market structure where a single seller produces a unique product with no close substitutes, having complete control over the market price.