In Problem 6, If There Are No Fixed Costs and Marginal

question 17

Multiple Choice

In Problem 6, if there are no fixed costs and marginal cost is constant at $8, the price elasticity of demand at the profit-maximizing level of output is closest to

• A) -1.17.
• B) -4.70.
• C) -0.85.
• D) -2.35.
• E) -0.43.

Determine the appropriateness of normal approximation for the sampling distribution of sample proportions.

Apply the Central Limit Theorem to sampling distributions of sample proportions.

Use probability techniques to assess the likelihood of specific outcomes within sampling distributions.

Evaluate claims based on statistical evidence from sample proportions.

---

Definitions:

Cross-price Elasticity of Demand

A measure of how the quantity demanded of one good responds to a change in the price of another good.

Quantity Demanded

The specific amount of a good that consumers are willing and able to buy at a given price.

Income Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in consumers' income.

Goods and Services

The physical items (goods) and activities or benefits (services) that are produced and provided to satisfy consumers' needs and wants.