A heart surgeon starts with an initial price of $3,000 and reduces price to $2000. In response, quantity demanded of heart surgeries does not change, and stays at 300. Use the mid-point method of elasticity to calculate | Ed]. Which of the following is true? a) |Ed|>1 (Price elasticity of demand is greater than 1) b) 0<| Ed|<1 (Price elasticity of demand is greater than 0 but less than 1) c) Ed|=1 (Price elasticity of demand is equal to 1) d) |Ed|=0 (Price elasticity of demand is equal to 0)

A heart surgeon starts with an initial price of $3,000 and reduces price to $2000. In response, quantity demanded of heart surgeries does not change, and stays at 300. Use the mid-point method of elasticity to calculate | Ed]. Which of the following is true? a) |Ed|>1 (Price elasticity of demand is greater than 1) b) 0<| Ed|<1 (Price elasticity of demand is greater than 0 but less than 1) c) Ed|=1 (Price elasticity of demand is equal to 1) d) |Ed|=0 (Price elasticity of demand is equal to 0)

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 2E: Plot the price and quantity data given in the demand schedule of exercise 1. Put price on the...

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Question

A heart surgeon starts with an initial price of $3,000 and reduces price to $2000. In
response, quantity demanded of heart surgeries does not change, and stays at 300.
Use the mid-point method of elasticity to calculate | Ed]. Which of the following is
true?
a) | Ed |>1 (Price elasticity of demand is greater than 1)
b) 0<| Ed |<1 (Price elasticity of demand is greater than 0 but less than 1)
c) Ed|=1 (Price elasticity of demand is equal to 1)
d) | Ed|=0 (Price elasticity of demand is equal to 0)

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