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Tidy Tidy
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8 years ago
Economist Jerry Hausman estimated the price elasticity of demand for "Post Raisin Bran" and "All types of breakfast cereals." He found that the price elasticity of demand for Post Raisin Bran was -2.5 and the price elasticity of demand for "All types of breakfast cereals" was -0.9. Which of the following can be implied from Hausman's estimates?
A) The demand for "All types of breakfast cereals" is elastic.
B) A 1 percent increase in the price of Post Raisin Bran will lead to a 25 percent decrease in the quantity demanded of Post Raisin Bran.
C) The demand for Post Raisin Bran is more elastic than the demand for "All types of breakfast cereals."
D) A 1 percent decrease in the price of breakfast cereals will lead to a 2.5 percent increase in the quantity demanded of Post Raisin Bran.
Textbook 
Essentials of Economics

Essentials of Economics


Edition: 4th
Authors:
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Repeat after me: 'Calm down. Things are gonna be fine. Things are gonna be all great. Just relax.' Wink Face
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Chimelo46Chimelo46
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8 years ago
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klor04

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8 years ago
The textbook reference in your signature really helped me narrow it down.

Happy to help Wink Face
klor04
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