If the price elasticity of demand is -0.8 and the firm decreases price, revenue will
a. Increase
b. Decrease
c. Stay constant
d. become zero, they would lose all their customers
b
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Before an uneven rise in prices Allan consumed five bread and six juice. After the price increase and with an increased welfare payment from the government Allan consumes four bread and seven juice
Does the government payment represent a true cost-of-living adjustment? A) Yes, if the two consumption bundles lie on the same indifference curve. B) Yes, if the second bundle yields more utility than the first. C) No, the first bundle is clearly preferred. D) Not enough information.
To understand how the price of a good is determined in a free market, one must account for the desires of:
A. sellers. B. governmental agencies. C. buyers. D. buyers and sellers.
What is the link between purchasing power parity, inflation and the exchange rate?
What will be an ideal response?
The marginal rate of substitution measures
A. the consumer's willingness to substitute one product for another so that marginal utility will remain unchanged. B. the consumer's willingness to substitute one product for another so that total utility will remain unchanged. C. the changes in marginal utility along the indifference curve. D. the impact of product substitution.