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5. Suppose in 2022 the price of softwood lumber increases from $1.31 per board foot to $2.14 per board foot and quantity demanded drops by
5. Suppose in 2022 the price of softwood lumber increases from $1.31 per board foot to $2.14 per board foot and quantity demanded drops by 7.81% this would mean the _____% increase in price was __________ to make demand unit elastic. This would also mean that a tax lumber designed to pay for climate change research would impact producers__________________ than consumers and government would see __________ revenue from this tax.
- 48.12; not enough; less, raise
- 1.725; enough; Less, lower
- .1623; enough; More, greater
- 41.99; not enough; Less, greater
6. Based on your answer to question #5 the price elasticity of demand for lumber equals_______ because:
- 1.725; there are insufficient substitutes for lumber in home building.
- 48.12; the percentage change in quantity demanded is less than the percentage change in price.
- .16; lumber is a necessity during a boom in housing production.
- .0761; the percentage of income it takes to buy lumber is small for home builders.
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