2 28 29 50 d. Price will fall. QUESTION 39 Using the midpoint method, the price

Question

2 28 29 50 d. Price will fall. QUESTION 39 Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 2. Which of the following events is consistent with a 0.1 percent increase in the price of the good? O a. The quantity of the good demanded decreases by 0.2 percent b The quantity of the good demanded decreases by 0.05 percent. C. The quantity of the good demanded decreases from 250 to 150 od. The quantity of the good demanded decreases from 200 to 100. QUESTION 40 To obtain the market demand curve for a product, sum the individual demand curves

Explanation / Answer

a is correct

Elasticity of demand=

%change in quantity demanded / %change in price

-2= %change in quantity demanded / 0.1

%change in quantity demanded= -2(0.1) = -0.2

Quantity demanded decreases by 0.2%

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