If the elasticity of demand for cigarettes by teenagers is 1.5, then to reduce teen smoking by 60 percent, tobacco companies would need to raise their prices by:
A. 15%.
B. 40%.
C. 60%.
D. 90%.
Answer: B
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A decrease in the price of driver liability insurance will ________ the ________ for new automobiles
A) decrease; demand B) increase; demand C) decrease; supply D) increase; supply E) None of the above is correct.
If a perfectly competitive industry is in long-run equilibrium, firms maximize profits, and the process of entry and exit results in
A. all firms producing where P = MC = AC. B. a left shift in the industry supply curve. C. a few firms earning economic profits. D. the price falling to the point where MR > MC.
If a laborer in Mexico can produce 2 bushels of wheat or 4 bushels of corn in a day, the opportunity cost of producing wheat is 4 bushels of corn
a. True b. False Indicate whether the statement is true or false
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.