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Unformatted text preview: The PPC bows out here, which means that the opportunity cost of pizza (the thing on the horizontal axis) RISES as more pizza is produced. The PPC is "steeper" when pizza is 60 than when it was 40. This means that when pizza is 60, you have to give up more pasta in order to get one more pizza than when pizza was 40. The Law of Demand means that: A) demand curves are negatively sloped The price elasticity of demand is the percent change in quantity demanded divided by the percent change in price that caused the change in quantity demanded. It measures the responsiveness of quantity demanded to changes in a goods own price . hen pizza was $8 5 were bought then price went to $10 and 4 were bought what was the price elasticity %change in quantitiy/%price change=(4-5)/5/((10-8)/8)=-20%/25%=-.8...
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This note was uploaded on 12/14/2009 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.
- Spring '07