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In the Village of Frankfurter, the Demand Function for Sausages

Question 56

Multiple Choice

In the village of Frankfurter, the demand function for sausages per person is D(p) = 20 - 1.5p, where p is the price of a single sausage.The present population of Frankfurter is 100 persons.Suppose that 10 more people move into town, each of whom has the same demand function as the old residents.At a price of $2, the price elasticity of demand for sausages in Frankfurter is


A) increased by 10%.
B) decreased by 10%.
C) unchanged.
D) increased by 15%.
E) none of the above.

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