Suppose the demand for meals at a medium-priced restaurant is elastic. If the management of the restaurant is considering raising prices, it can expect a relatively:
A) large decrease in quantity demanded.
B) large decrease in demand.
C) small decrease in quantity demanded.
D) small decrease in demand.
A
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Explain the Hotelling principle
What will be an ideal response?
When the quantity of a good bought and sold is below the market equilibrium quantity, the loss of total surplus that results is called:
A. deadweight loss. B. producer surplus. C. consumer surplus. D. total surplus.
Many auction markets
a. are perfectly competitive because they involve an identical or nearly identical commodity, many buyers, and because the seller has no influence over the price b. are monopolistic because there is only one seller c. exist only on the Internet, because of the difficulty of assembling all buyers in a single location d. are controlled and run by governments e. involve numerous firms, none of which is large enough to influence the market price
If advertising were used to strengthen brand loyalty, you would expect: a. demand for the product to become more elastic
b. consumers to become less sensitive to price differences among similar goods. c. firms to lower price in order to increase revenue. d. that consumer demand for related products would be unaffected.