If the price elasticity of demand coefficient equals 2 then:
a. a 7 percent decrease in the price will result in a 14 percent decrease in the quantity demanded.
b. a price decrease will increase total revenue.
c. the good has an inelastic demand.
d. there is likely few substitutes, a short time period under consideration, or this good accounts for a relatively small percentage of consumers' budgets.
b
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Explain the theory of purchasing power parity
What will be an ideal response?
MFP growth represented by a will be higher than the growth of labor productivity if
A) k > n. B) k < n. C) k = n. D) None of the above. The relative size of k and n do not affect MFP growth.
Which of the following is a question that an economist would use to break down a problem?
A. Does the decision maker have a track record of being rational? B. Will the average income per person for the society increase? C. Is there a scarce resource that will be allocated? D. How might one person feel about the solution to the problem?
In a competitive market economy, a resource in short supply will be allocated
a. so that each firm gets enough to keep producing some portion of its output. b. according to how much each firm purchased before the shortage. c. to those firms that can make the most profitable use of it. d. by government regulation.