Consider the market for bicycles. If a dealer cuts prices by 10 percent and sells 20 percent more bikes, then demand for bicycles is:
A. inelastic, and total revenue will increase.
B. elastic, and total revenue will increase.
C. inelastic, and total revenue will decrease.
D. elastic, and total revenue will decrease.
Answer: B
You might also like to view...
The golden rule of profit maximization states that any firm maximizes profit by producing where
a. demand is unit elastic, and total revenue is greatest b. price equals average revenue c. price equals marginal revenue d. price equals marginal cost e. marginal revenue equals marginal cost
The Laffer curve shows the relationship between tax:
a. revenue and tax rates. b. revenue and take-home pay. c. revenue and government spending. d. rates and take-home pay. e. rates and government spending.
Assume that markets clear. If in the labor market there is
a. an excess supply of labor, wages will rise b. an excess demand for labor, wages will fall c. an excess demand for labor, wages will rise d. an excess supply of labor, wages stay constant e. a decline in labor demand, wages will rise
Only final goods and services count in calculating the GDP.
Answer the following statement true (T) or false (F)