Recall the Application about how changes in demand affect the price of milk to answer the following question(s).
-According to the Application, the price elasticity of demand for milk is -0.20 and the long-run price elasticity of supply for milk is 2.50. If the demand for milk decreases by 6 percent, the equilibrium price of milk will _______ in the long run.
A)increase by 2.7 percent
B)decrease by 2.2 percent
C)increase by 13.8 percent
D)decrease by 16.2 percent

Question

Quizplus · Accepted Answer

The Answer of Recall the Application about how changes in demand affect the price of milk to answer the following question(s).
-According to the Application, the price elasticity of demand for milk is -0.20 and the long-run price elasticity of supply for milk is 2.50. If the demand for milk decreases by 6 percent, the equilibrium price of milk will _______ in the long run.
A)increase by 2.7 percent
B)decrease by 2.2 percent
C)increase by 13.8 percent
D)decrease by 16.2 percent

Recall the Application About How Changes in Demand Affect the Price