The price elasticity of demand for ground beef has been estimated to be 1.0.If mad cow disease strikes the United States and a large percentage of the cattle are removed from the market,how will that affect total expenditures on ground beef,all other things equal?
A)Total expenditures will remain unchanged.
B)Total expenditures will fall by more than 1%.
C)Demand will fall by 1%,but total expenditures will fall by less than 1%.
D)Total expenditures will rise.

Question

Quizplus · Accepted Answer

When the price elasticity of demand is equal to 1.0, it means the quantity demanded changes by the same percentage as the price, leading to unchanged total expenditures when price changes.

The Price Elasticity of Demand for Ground Beef Has Been