Which of the following describes a situation in which demand must be elastic?
a. The price of dish soap rises by 10 cents, and quantity of dish soap demanded falls by 50.
b. The price of dish soap rises by 10 cents, and total revenue rises.
c. A 20 percent increase in the price of dish soap leads to a 20 percent decrease in the quantity of dish soap demanded.
d. Total revenue does not change when the price of dish soap rises.
e. Total revenue decreases when the price of dish soap rises.
E
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In reading the stock market quotes in the newspaper, the column with the heading "P/E" gives the
A) number of shares of the stock traded that day. B) dividend per share divided by the closing price per share. C) stock symbol for the company. D) latest closing price per share divided by the latest available earnings per share.
When a producer can control the market price for the good it sells, the producer
A. Is certain to make a profit. B. Is an entrepreneur. C. Has market power. D. Is a perfectly competitive firm.
The pair of items that is likely to have the LARGEST positive cross-price elasticity of demand is:
A) coffee and tea. B) skis and ski boots. C) pizza and pepperoni. D) milk and cookies.
Refer to the information provided in Figure 5.4 below to answer the question(s) that follow.
Figure 5.4Refer to Figure 5.4. The demand for milkshakes is unit elastic at Point C. If the milkshake price falls from P1 to P2, total revenue will
A. decrease. B. remain constant. C. either increase or decrease. D. increase.