The Price Elasticity of Demand for Ground Beef Has Been

question 57

Multiple Choice

The price elasticity of demand for ground beef has been estimated to be 1.0.If mad cow disease strikes Alberta beef producers and a large percentage of the cattle are removed from the market,how will that affect total expenditures on ground beef,all other things equal?

• A) Total expenditures will remain unchanged.
• B) Total expenditures will fall by more than 1%.
• C) Demand will fall by 1%,but total expenditures will fall by less than 1%.
• D) Total expenditures will rise.

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Definitions:

Downward-Sloping Demand

A concept in economics that indicates demand for a good or service decreases as its price increases, assuming all other factors remain constant.

Output

The amount of goods or services produced by a company, industry, or economic system.

Price Searchers

Price searchers are businesses or sellers who determine the sale price of their products or services based on market conditions, rather than fixed prices.

Price Leaders

Price leaders are companies that dominate their sector and can influence the market price of goods or services by setting a price others follow.