At a price of $20, a store can sell 24 picture frames a day. At a price of $18 the store can sell 33 picture frames a day. Since total revenue ________ by the price decrease, demand must be ________.
A. is increased; inelastic
B. is decreased; elastic
C. is increased; elastic
D. is increased; unit elastic
Answer: C
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If an economy experiences an increase in its capital stock, everything else constant, then at constant world prices, it will
A) produce more of the labor intensive good and less of the capital intensive good. B) produce more of both goods. C) produce the same amount of both goods. D) produce less of the labor intensive good and more of the capital intensive good.
________ is a good measure of the opportunity cost of holding money
A) The real interest rate B) Liquidity preference C) Real income D) The inflation rate E) none of the above
The difference between the interest rate on loans to households and firms and the rate on completely safe assets is known as ________
A) the discount rate B) the FICO score C) the credit spread D) the prime rate
If Big City Cameras advertises a 90 day low-price guarantee that will refund any of its customers the difference between the price they paid for a camera and a lower price offered by Big City Cameras for the same camera, this is an example of ________.
A) a meet-or-release clause B) a meet-the-competition clause C) price visibility D) a most-favored-customer clause