Fred's Price Elasticity of Demand for Milk Is -2 at Today's

question 61

Multiple Choice

Fred's price elasticity of demand for milk is -2 at today's prices when we measure price in dollars and quantity of milk in quarts. If the price per quart of milk stays the same but we measure quantity of milk in gallons and price in dollars, then what will be the elasticity of demand for gallons of milk? (A gallon is four quarts.)

• A) -1
• B) -1/2
• C) -8
• D) -4
• E) -2

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Definitions:

Assertion

A confident and forceful statement of fact or belief, commonly used in argument or discourse.

Duress

A situation where a person performs an act as a result of violence, threat, or other pressures against them.

Coercion

The act of compelling a party to act in an involuntary manner by use of threats or force.

Contract

A legally binding agreement between two or more parties that outlines obligations, rights, and terms that are enforceable by law.