During spring break, students have an elasticity of demand for a trip to Cancun, Mexico, of ?4. How much should an airline charge students for a ticket if the price it charges the general public is $420? Assume the general public has an elasticity of ?2.
A. $280
B. $160
C. $210
D. $105
Answer: A
You might also like to view...
Which of the following statements is FALSE?
A. An increase in income causes the demand curve for an inferior good to shift to the right. B. An increase in income causes an increase in the demand for a normal good. C. An increase in income causes a decrease in the demand for an inferior good. D. A decrease in income causes the demand curve for a normal good to shift to the left.
If the Federal Reserve sells $1,500 in bonds and the resulting money supply change is $7,500, what is the required reserve ratio?
a. 5.0 b. 0.2 c. 0.1 d. 0.4 e. 0.8
Which of the following institutions is responsible for supervising the banking system of the United States?
A. The Federal Reserve System B. The Open Market Committee C. The U.S. Treasury D. The Federal Deposit Insurance Corporation
If a firm equates MR and MC, then:
A. TR is at a maximum, and TC is at a minimum. B. output is at a maximum. C. both TR and TC are at a maximum. D. profits are at a maximum or losses are at a minimum.