If at a Price of $10, Quantity Bought Will Be

question 75

Multiple Choice

If at a price of $10, quantity bought will be 5400 per day, and at $15, quantity bought will be 4600 per day, then the price elasticity of demand is approximately:

• A)0.2.
• B)0.4.
• C)0.6.
• D)2.5.
• E)6.0.

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Definitions:

Industry

A collection of businesses and companies that produce similar goods or offer similar services within an economic sector.

Invisible Hand

A metaphor coined by Adam Smith to describe how individuals pursuing their self-interest unwittingly contribute to the economic prosperity of society.

Market System

An economic approach wherein the processes of investment, manufacturing, and goods distribution are directed by supply-demand correlation, with a system that freely sets the prices of goods and services.

Prices

The amount of money required to purchase goods or services, indicating the value that consumers are willing to pay and sellers are willing to accept.