Refer to the information provided in Figure 5.4 below to answer the question(s) that follow.
Figure 5.4Refer to Figure 5.4. The demand for milkshakes is unit elastic at Point C. If a store reduces the price of a milkshake from P3 to P4, its total revenue will
A. either increase or decrease.
B. remain constant.
C. decrease.
D. increase.
Answer: C
You might also like to view...
Explain why it is difficult to determine expected real rates of interest
What will be an ideal response?
When the economy is in recession, does the Fed want to raise the federal funds rate so as to increase aggregate demand and increase real GDP? Explain your answer
What will be an ideal response?
When quantity supplied is very responsive to a change in price, supply is
A) elastic. B) unit-elastic. C) inelastic. D) income sensitive.
Which of the following will most likely occur under a system of clearly defined and enforced private property rights?
a. Resource owners will fail to conserve vital resources, even if they expect their supply to be highly limited in the future. b. Resource owners will ignore the wishes of others, including others who would like to use the resource that is privately owned. c. Resource owners will fail to consider the wishes of potential future buyers when they decide how to employ privately owned resources. d. Resource owners will gain by discovering and employing their resources in ways that are highly valued by others.