Suppose a Decrease in Demand Causes the Price to Decrease

question 185

Multiple Choice

Suppose a decrease in demand causes the price to decrease from $4 to $3 and the quantity to decrease from 1,000 to 700.Using the midpoint method,the elasticity of supply equals

• A) 0.81.
• B) 1.24.
• C) 2.83.
• D) 0.18.
• E) None of the above answers is correct.

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Definitions:

Commercial Sales Agreement

A contract between two parties in which goods are sold from the seller to the buyer under agreed terms.

UCC

The Uniform Commercial Code, a comprehensive set of laws that regulate sales and commercial transactions across the United States.

Specific Performance

A legal remedy requiring a party to fulfill their obligations under a contract, rather than paying damages for nonperformance.

Monetary Damages

Money claimed by or ordered paid to a party to compensate for injury or loss caused by the wrong of the opposite party.