The price elasticity of demand for a textbook is estimated to be 1 no matter what the price or quantity demanded. In this case:
A. a decrease in price will increase the total revenue of sellers.
B. a 10 percent increase in price will result in a 10 percent increase in the quantity demanded.
C. a 10 percent increase in price will result in a 10 percent decrease in the quantity demanded.
D. an increase in price will decrease the total revenue of sellers.
Answer: C
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The income elasticity of demand for haircuts is 1.5, and the income elas-ticity of demand for food is 0.14 . You take a weekend job, and the income you have to spend on food and haircuts doubles
If the prices of food and haircuts remain the same, will you double your expenditure on haircuts and double your expenditure on food? Explain why or why not.
Matt is offered a job driving the campus shuttle bus from 4 p.m. to 6 p.m. each Monday. His reservation wage for this job is $7 per hour. Suppose the campus transportation director offers Matt $50 per hour. Will Matt accept this job?
A. No, accepting the job means a negative economic surplus for Matt. B. Yes, although accepting the job means a negative economic surplus for Matt, it's still better than having no job. C. No, although accepting the job means a positive economic surplus for Matt, still it's not the best option for him. D. Yes, accepting the job means a positive economic surplus for Matt.
Any event that changes any of the determinants of YN will shift the LRAS.
a. true b. false
Refer to the graph which shows the supply and demand for money where Dm1, Dm2, and Dm3 represent different demands for money and Sm1, Sm2, and Sm3 represent different levels of the money supply. The initial equilibrium point is A. What will be the new equilibrium point following a decrease in the money supply?
A. B
B. E
C. F
D. I