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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.

  1. 48.12; not enough; less, raise
  2. 1.725; enough; Less, lower
  3. .1623; enough; More, greater
  4. 41.99; not enough; Less, greater

6. Based on your answer to question #5 the price elasticity of demand for lumber equals_______ because:

  1. 1.725; there are insufficient substitutes for lumber in home building.
  2. 48.12; the percentage change in quantity demanded is less than the percentage change in price.
  3. .16; lumber is a necessity during a boom in housing production.
  4. .0761; the percentage of income it takes to buy lumber is small for home builders.

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