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The Price Elasticity of Demand for Cabbage in Southern Ontario

Question 11

Multiple Choice

The price elasticity of demand for cabbage in Southern Ontario has been estimated to be 0.25.If an insect infestation destroys 20% of the region's cabbage crop (and thus reduces supply) ,how will that affect total expenditures on cabbage,all other things equal?


A) Total expenditures will rise.
B) Total expenditures will fall.
C) Total expenditures will remain unchanged.
D) The information is insufficient to answer the question.

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