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When the Price of Oranges Increases from $4 to $6

Question 516

Multiple Choice

When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to


A) 3.
B) 3/7 or 0.4286.
C) 1/3 or 0.3333.
D) 1/4 or 0.25.

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