Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that
A) there must have been technological advances in the way SUVs are produced.
B) the "law of demand" does not hold true in this market.
C) there must have movement leftward along the supply curve for SUVs.
D) there must have been a rightward shift of the demand curve for SUVs.
D
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Why would a monopolist never price in the inelastic portion of the demand curve?
What will be an ideal response?
An increase in government spending will cause the
A) LM curve to shift to the right. B) LM curve to shift to the left. C) IS curve to shift to the right. D) IS curve to shift to the left.
Jack's Lock and Key is considering remodeling. It estimates that the remodeling will cost $6,000 and that as a result revenues will rise by $3,000 the first year, $2,500 the second year, $1,500 the third year and have no effect after then. If the interest rate is 5%, should Jack's remodel? Defend your answer by showing your work
Suppose that the elasticity of demand for hamburgers is 2.5 and price decreases by 14%. By what percentage will quantity demanded for hamburgers increase?
A. 2.5% B. 5.6% C. 25% D. 35%