Suppose That Demand Is Linear,Q^d = 100 - 12P

question 18

Multiple Choice

Suppose that demand is linear,Q^d = 100 - 12P.At P = 5 and Q = 40,price elasticity of demand is:

• A) -2/3
• B) -2
• C) -12
• D) -3/2

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Definitions:

Expand Output

The process of increasing the quantity of goods or services produced by a business or economy.

Marginal Cost

The additional cost incurred by producing one more unit of a good or service, a critical concept for decision-making in production and pricing.

Marginal Revenue

The extra income a business earns by selling an additional unit of a product or service.

Profit-maximizing Firm

A business entity that aims to achieve the highest possible profit through its operations and decision-making, focusing on optimizing revenue and minimizing costs.