Multiple Choice
The current price floor in the agricultural lettuce market makes it such that price of lettuce is 25% higher than equilibrium price and 100 heads of lettuce are demanded.Assuming that the elasticity of demand for lettuce is -0.50,what would be the equilibrium price and quantity of lettuce if the government removed the current price floor?
A) Price = 0.875, Quantity = 125
B) Price = 1, Quantity = 112.5
C) Price = $0.75, Quantity = 112.5
D) Price = $0.75, Quantity = 125
Correct Answer:
Verified
Correct Answer:
Verified
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