A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon, it sold 33% less milk. Since everything else remained the same, we would say the
a. demand for milk is perfectly elastic
b. demand for milk is elastic
c. demand for milk is perfectly inelastic
d. demand for milk is unitary elastic
e. law of supply does not apply in this situation
D
You might also like to view...
In the foreign exchange market, how will each of the following influences affect the demand for dollars and the demand curve for dollars?
a. an increase in the exchange rate b. an increase in the U.S. interest rate c. a fall in the expected future exchange rate
The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________
A) rises; decreases B) falls; perhaps changes but we can't say if it increases, decreases, or stays the same C) falls; increases D) does not change; perhaps changes but we can't say if it increases, decreases, or stays the same E) rises; perhaps changes but we can't say if it increases, decreases, or stays the same
When would a risk averse individual not insure a risky event?
What will be an ideal response?
An exchange rate crisis may lead to a banking crisis and disintermediation
Indicate whether the statement is true or false