Refer to the Figure Below

question 106

Multiple Choice

Refer to the figure below. What is the price elasticity of demand when the price of rice is $6 per pound?

• A)0.5
• B)0.67
• C)2

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in the market.

Value Loss

The decrease in worth or utility of an asset or commodity, often due to changes in market demand, deterioration, or obsolescence.

Gift

An item given to someone without the expectation of payment or anything in return.

Water and Diamond Paradox

A classic economic paradox questioning why diamonds are more expensive than water, despite water being essential for survival and diamonds not.