Multiple Choice
The current price floor in the agricultural lettuce market makes it such that the price of lettuce is 25% higher than the equilibrium price and that 100 heads of lettuce are demanded.Assuming that the elasticity of demand for lettuce is -0.50,how much would revenue (P ∗ Q) change for the lettuce company if the government removed the current price floor?
A) Revenue will increase by $15.60.
B) Revenue will decrease by $15.60.
C) Revenue will increase by $40.60.
D) Revenue will increase by $ 9.40.
Correct Answer:
Verified
Correct Answer:
Verified
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