The Price Elasticity of Demand for a Certain Agricultural Product

question 24

Multiple Choice

The price elasticity of demand for a certain agricultural product is constant (over the relevant range of prices) and equal to -2.The supply elasticity for this product is constant and equal to 3.Originally the equilibrium price of this good was $45 per unit.Then it was discovered that consumption of this product was unhealthy.The quantity that would be demanded at any price fell by 100%.The percent change in the long-run equilibrium consumption of this good was

• A)-100%.
• B)-64%.
• C)-20%.
• D)-60%.
• E)There is not enough information to determine the answer.

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