Which of the following is not characteristic of the demand for a commodity that is elastic?
A. The relative change in quantity demanded is greater than the relative change in price.
B. Buyers are relatively sensitive to price changes.
C. Total revenue declines if price is increased.
D. The elasticity coefficient is less than one.
Answer: D
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Land of Many Lakes (LML) sells butter to a broker in Albert Lea, Minnesota. Because the market for butter is generally considered to be competitive, LML does not choose the
a. quantity of butter to produce. b. price at which it sells its butter. c. profits it earns. d. All of the above are correct.
At her current level of consumption, Jess gets half as much marginal utility from an additional bagel as from an additional muffin. If the price of muffin is $2 each, then Jess is maximizing her utility if the price of a bagel is:
A. $2.00 B. $1.00 C. $1.50 D. $4.00
How does the leftward shift of the supply curve in graph 2 affect the individual firm shown in graph 1?
a. It causes the firm’s quantity of sales to decrease.
b. It causes the firm’s product price to increase.
c. It causes the firm to dip below its average total cost.
d. It causes the demand for the firm’s products to decrease.
The government's chief forecasting gauge for business cycles is the:
A. unemployment rate. B. real GDP. C. personal income index. D. index of leading indicators.