Friday, December 05, 2008

From a practice question:
Alice Costain operates a convenience store in the financial district of London. If Costain increases the price of a Magnim ice cream bar from £1.00 to £1.15, weekly sales decrease from 200 units to 180 units. Which of the following statements is most accurate?

A. The price elasticity of demand is -0.66.
B. The slope of the demand curve equals the elasticity of demand.
C. The price increase will lead to an increase in total value of Magnim ice cream bars
D. Since the price elasticity of demand is less than one, the demand for Magnim is elastic.

Now I feel like a nice chocolatey Magnum...or this

Entries these days seem to be getting more and more whimsical; pardon me - brain's evaporating.

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