Suppose that an Italian ice cream firm is facing a linear demand curve and that the current price for the Italian ice cream is set at a point where the price elasticity is 0.7. If the firm decreases the product price:
A. the demand becomes more inelastic and total revenue increases.
B. the demand becomes more inelastic and total revenue decreases.
C. the demand becomes less inelastic and total revenue increases.
D. the demand becomes less inelastic and total revenue decreases.
Answer: B
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Which of the following is more likely to have perfectly elastic or nearly perfectly elastic demand?
A) a textbook required for an economics course B) the guitar produced by a master craftsman C) milk produced by a Wisconsin dairy farmer D) the services offered by the only allergist in the community
Which of the following is not part of M2?
a. savings-type deposits b. noninstitutional money market mutual fund balances c. small time deposits d. large time deposits (over $100,000) e. cash held by the public
Valuation
What will be an ideal response?
Employers can find themselves in an adverse selection problem if there are too:
A. many applicants for each job. B. few applicants for each job. C. many qualified applicants for each job. D. many underqualified applicants for each job.