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A Decrease in the Supply of Sugar Increases the Price

Question 133

Multiple Choice

A decrease in the supply of sugar increases the price of sugar from $1.00 a packet to $1.25 a packet. The quantity demanded decreases from 100 packets a day to 80 packets a day. The price elasticity of demand for sugar is _______.


A) 0.5
B) 0.75
C) 1.25
D) 1.0

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