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    Exam 5: Elasticity: Measuring Responsiveness
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    Butter Producers Know That the Price Elasticity of Demand for Butter
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Butter Producers Know That the Price Elasticity of Demand for Butter

Question 14

Question 14

Multiple Choice

Butter producers know that the price elasticity of demand for butter is 0.2. If they want to increase sales by 4%, they will have to lower price by:


A) 0.1%.
B) 1%.
C) 4%.
D) 20%.

Correct Answer:

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