Suppose a Decrease in Price Increases Quantity Demanded from 8

question 26

Multiple Choice

Suppose a decrease in price increases quantity demanded from 8 to 12.Using the mid-point formula,the percentage change in quantity demanded is:

• A) 0.1, and is elastic.
• B) 40 = 400 percent.
• C) 0.40 = 40 percent.
• D) 0.40 = 40 percent

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Definitions:

External Costs

Costs of a transaction or activity that affect people other than those directly involved in the transaction, not accounted for in the market price.

Competitive Market

A market structure characterized by a large number of firms competing against each other, leading to efficient prices and products.

Resources

Assets, materials, and inputs needed to produce goods and services.

Overallocated

A situation where resources are disproportionately distributed or excessively committed to a particular project or area, potentially leading to inefficiencies.