Suppose that in a month the price of movie rentals decreases from $3.25 to $3. At the same time, the quantity of movie rentals demanded increases from 100 to 120. The price elasticity of demand for movie rentals (calculated using the midpoint formula) is:
A. zero.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: D
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Which of the following will not contribute to higher wage rates for labor?
a. increased unionization and decreased nonunionization of employees in the economy b. a rapid increase in the demand for labor c. significantly relaxed immigration standards d. increases in technological advances that are substitutes for labor
Which of the following will be the most likely impact of an unanticipated increase in the money supply?
What will be an ideal response?
In general, the quantity of savings supplied to be used for lending increases with the rate of interest.
Answer the following statement true (T) or false (F)