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

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

A Lease

A contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset in exchange for payment over a specified period.

Gross Lease

A lease in which the monthly payment made by the tenant remains the same and the landlord pays the operating expenses of the building.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding cost of goods sold.