Elasticity of demand for bus services is 0.23 for the peak hours and 0.42 for off-peak hours. The same percentage increase in price would:
A. raise revenue for peak hours but lower revenue for off-peak hours.
B. raise revenues for both, but more for peak hours.
C. lower revenues for both, but more for peak hours.
D. lower revenue for peak hours but raise revenue for off-peak hours.
Answer: B
You might also like to view...
If real GDP is $20 trillion, consumption is $14 trillion, planned investment is $4 trillion, government purchases are $4 trillion, net exports are -$1 trillion, then the unintended inventory adjustment is:
a. -$2 trillion. b. -$1 trillion. c. $1 trillion. d. $2 trillion.
Which of the following statements is true?
A) In the monetarist transmission mechanism, changes in the money market directly affect aggregate demand. B) In the monetarist transmission mechanism, there is no need for the money market to affect the loanable funds market or investment before aggregate demand is affected. C) In the monetarist transmission mechanism, if individuals are faced with an excess supply of money, they spend that money on a wide variety of goods---not just bonds or other assets, as is the case in the Keynesian transmission mechanism. D) a and b E) a, b and c
Answer the following questions true (T) or false (F)
1. In a decreasing-cost industry, the entry of new firms lowers average cost at each level of output. 2. When firms exit a perfectly competitive industry, the market supply curve shifts to the left. 3. Assume that the personal computer industry is perfectly competitive. The fact that the price of personal computers over the last decade has fallen despite increases in demand signifies that the industry is a decreasing-cost industry.
The figure above shows a labor market. If this labor market is perfectly competitive, the wage rate is
A) $4 per hour. B) $6 per hour. C) $8 per hour. D) $10 per hour.