An art museum raises its admission price, and ends up with a decrease in its total revenue. How could you explain this situation to the museum director?
What will be an ideal response?
If price goes up, quantity demanded will fall. If total revenue fell, this must mean that the percentage decrease in quantity demanded was larger than the percentage increase in price. Therefore, the demand for museum admission must be elastic.
You might also like to view...
A decrease in the price level will shift the money demand curve to the ________, causing the nominal interest rate to ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
Lags in the policy-making process come from:
A. lack of understanding the current state of the economy. B. the process of deciding on and passing legislation. C. the time it takes for policy to have an impact on the economy. D. All of these are true.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point A necessarily represents
A. only hybrid cars being produced. B. an unattainable production point. C. what society wants. D. the economy's optimal production point.