Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus:
A. the demand for peanuts is elastic.
B. the demand for peanuts is inelastic.
C. the demand curve for peanuts has shifted to the right.
D. no inference can be made as to the elasticity of demand for peanuts.
Answer: B
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You are likely to think that the relative price of your good has risen and you should increase your output if you expected
A) the inflation rate to be 10% and the price of your good rose 7%. B) the inflation rate to be 10% and the price of your good rose 10%. C) the inflation rate to be 10% and the price of your good rose 13%. D) the inflation rate to be 0% and the price of your good fell 10%.
Refer to the graph below representing the market demand curve for a monopolist’s output. Which of the following prices shown on the graph should the monopolist charge if it wishes to maximize its total revenue?
a. $12
b. $10
c. $8
d. Any of the above because total revenue does not change with a change in price.
The relationship between household saving and business investment spending in equilibrium is: Planned investment = household saving - government spending + taxes
a. True b. False
In 2010, high-income families (the top 20 percent) in the United States earned approximately ____ percent of the total before-tax income
a. 34 b. 48 c. 62 d. 79