Suppose we estimate that the demand elasticity for fine leather jackets is -.7 at their current prices. Then we know that:
a. a 1% increase in price reduces quantity sold by .7%.
b. no one wants to buy leather jackets.
c. demand for leather jackets is elastic.
d. a cut in the prices will increase total revenue.
e. leather jackets are luxury items.
a
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Which is the largest component of aggregate expenditure?
A) consumption expenditures B) government expenditures C) net export expenditures D) planned investment expenditures
If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, calculate the arc price elasticity
A) -1.92 B) -1.64 C) -4 D) -2
Consumers are better off with pricing in the following order: 1)________; 2)________; 3)________
A) competitive market; perfect price discrimination; single-price monopoly B) competitive market; single-price monopoly; perfect price discrimination C) single-price monopoly; competitive market; perfect price discrimination D) Unable to determine.
Lin is maximizing total utility while consuming food and clothing. Her marginal utilities of food and clothing are 50 utils and 25 utils, respectively. If clothing is priced at $10 per unit, the price of a unit of food
a. must be rising b. must be falling c. must equal $10 as well d. must equal $20 e. cannot be determined without additional information.