If the price elasticity of demand for radios is 2.5 (dropping the minus sign), then a 50 percent reduction in the price of radios will lead to
a. the sale of 200 additional radios.
b. the sale of 125 percent more radios than before.
c. the sale of 150 percent more radios than before.
d. the sale of 25 percent more radios than before.
b
You might also like to view...
All of the following are ways by which existing firms can deter the entry of new firms into an industry except
A) continuously producing new and improved products. B) advertising products aggressively. C) threatening to raise prices. D) earning less than maximum profit.
Which mathematical expression describes what households do with their disposable income?
a. Y = C + I b. Y = C + I + G c. Y = C + S + G d. I = S e. Y = C + S
"Market power" is an expression used to indicate that a firm has
a. no rivals. b. the power to sell a given output at whatever price it chooses. c. some freedom from the rigors of intense competition. d. a monopoly over the product it produces.
Costs due to an increase in activity is called
a. the total cost. b. a negative marginal benefit. c. a marginal cost. d. an incentive loss.