Tele-Com, Inc., the nation’s largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the
A. demand curve for the Disney Channel shifted to the right.
B. supply curve of the Disney Channel shifted to the left.
C. demand for the Disney Channel is elastic in this price range.
D. demand for the Disney Channel is inelastic in this price range.
Answer: C
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Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units. Using the midpoint method, the elasticity of demand equals
A) 1.17. B) 0.85. C) 0.26. D) 1.56. E) None of the above answers is correct.
A shortage occurs in a market when:
A) supply exceeds demand. B) price is lower than the equilibrium price. C) price is higher than the equilibrium price. D) the marginal utility of consumption is negligible.
What is the primary reason that the highest quintile's share of the national income increased very rapidly over the last 20 years?
A. Poor people are lazy and do not want to work. B. All of our jobs have been shipped overseas. C. Tax cuts on the property owners and high income citizens. D. High cost of health care.
The equilibrium purchase price of an acre of land depends upon the current value of the marginal product of land and upon the __________
Fill in the blank(s) with correct word