Demand is elastic
A. when the percentage change in quantity demanded is greater than the percentage change in price.
B. when price increases lower total revenue.
C. when price decreases raise total revenue.
D. All of the choices are correct.
D. All of the choices are correct.
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The law of demand states that there is a negative relationship between price and quantity demanded, ceteris paribus
Indicate whether the statement is true or false
The CPI overstates inflation because the average consumer buys
A) less of those goods whose relative price has risen. B) more of those goods whose relative price has risen. C) lower quality goods if they have a choice. D) the same basket of goods every week. E) a generally random assortment of goods and services each week because what is purchased depends on what the consumer needs.
Recent proposals to allow the Social Security trust fund to invest in the stock market (instead of buying government bonds) are based on the premise that
A) the returns to stocks are higher than the returns to bonds. B) the returns to stocks aren't as risky as the returns to bonds. C) the transactions costs for investing in stocks are lower than the transactions costs for investing in bonds. D) stocks are more liquid than bonds.
In a given community, if the government builds more freeways, then the supply curve for freeway space shifts rightward and the demand curve for freeway space shifts leftward
Indicate whether the statement is true or false