When the Price of Bananas Is 50 Cents a Pound

question 96

Multiple Choice

When the price of bananas is 50 cents a pound, the total demand is 100 pounds.If the price elasticity of demand for bananas is -2, what quantity would be demanded if the price rose to 60 cents a pound?

• A)50 pounds
• B)90 pounds
• C)60 pounds
• D)80 pounds
• E)70 pounds

---

Definitions:

Public Offering Price

The price at which new issues of stocks or bonds are offered to the public by an issuer for the first time.

Spread

The difference between two prices or rates, such as the bid and ask price of a stock, or the interest rates of two different investments.

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, including both interest payments and capital gains.

Bond Indenture

A legal and binding contract between a bond issuer and the bondholders, specifying the terms of the bond such as the interest rate, maturity date, and other conditions.