If the quantity of concert tickets sold decreases by 10 percent when the price increases by 5 percent, this market is operating in which section of its downward-sloping straight-line demand curve?
A. the section above the point of unit elasticity
B. the point equal to unit elasticity
C. the section below the point of unit elasticity
D. This market show elastic demand which could occur at any point along the demand curve.
Answer: A
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A shift to the right in the demand curve for product A can be most reasonably explained by saying that:
A. the price of A has decreased and, as a result, consumers want to purchase more of it. B. consumer incomes have declined and they now want to buy less of A at each possible price. C. consumer preferences have changed in favor of A so that they now want to buy more at each possible price. D. the price of A has increased and, as a result, consumers want to purchase less of it.
Which of the following is considered a negative supply shock?
A) increasing immigration in the economy causes the labor supply to rise B) an improvement in technology C) an increase in unemployment D) an unexpected decrease in the refining capacity for oil
If a major crash of the financial system began, the Federal Reserve would
A. prop up stock prices by buying stocks in the 500 largest corporations. B. raise interest rates in order to provide banks with a more secure stream of income. C. provide money to banks in order to reassure investors and prevent banks from going bankrupt. D. immediately reduce the money supply to stop people from withdrawing cash from their banks.