Which of the following goods or services is most likely to have an elastic demand in the short run?
a. Electricity
b. Gasoline
c. Milk
d. Toyota 4-Runner SUV
d
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A change in consumer preferences will shift the budget line.
Answer the following statement true (T) or false (F)
Which of the following functions is not performed by prices in a free market?
a. guiding the allocation of resources b. conveying information about the marginal cost of production c. making the distribution of income more equitable d. replacing the need for governmental supervision of production
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.
Jerry sells cherry sno-cones along the boardwalk in New Jersey. During the summer this is a perfectly competitive business, and Jerry faces a perfectly elastic demand curve. If he wants to try to increase revenues he should
A. raise the price of his sno-cones to make more per sale. B. lower the price of his sno-cones to try to sell more. C. do nothing; there is nothing he can do to increase revenue. D. keep the price the same but produce more to increase sales.