Even though airfares have been increasing, the revenue earned by airlines has declined. Based on this statement, what may be concluded about price, cross-price, or income elasticity of demand?
What will be an ideal response?
The statement suggests that the price elasticity of demand for airlines is price elastic.
You might also like to view...
The price elasticity of demand for a good tends
A) not to vary over time because people adjust to changed circumstances. B) to be greater over the long run than over a short period of time. C) to be less over the long run than over a short period of time. D) to rise when the demand increases. E) toward unity in the long run.
Consider a firm that uses two inputs, labor and capital, to produce its output. Assume labor is measured on the horizontal axis and capital on the vertical axis
Which of the following best explains why the marginal rate of technical substitution decreases in absolute value as we move down an isoquant? A) The law of imperfect substitutability: labor and capital are not perfect substitutes; therefore, a firm must replace decreases in capital with increases in labor. B) The law of diminishing returns: for a given decline in capital, decreasing amounts of labor are required to produce the same level of output. C) The law of increasing marginal opportunity cost: if a firm uses less and less capital it must use more and more labor, which drives up the cost of labor. D) The law of diminishing returns: for a given decline in capital, increasing amounts of labor are required to produce the same level of output.
About two-thirds of black births are to unwed mothers
Indicate whether the statement is true or false
The big-push strategy, if successful, triggers
a. capital flight b. a cluster of interrelated investments c. an entrepreneurial surge in the economy d. forward linkage e. arbitrage