Answer the following questions true (T) or false (F)
1. If a firm's goal is to maximize revenue, it will price its product to correspond to the unit-elastic segment of its demand curve.
2. When Audrina raised the price of her homemade cookies, her total revenue increased. This suggests that the demand for Audrina's cookies is elastic.
3. If the price elasticity of demand is unit elastic, a 10 percent increase in price will result in a 10 percent increase in revenue.
1. TRUE
2. FALSE
3. FALSE
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Which of the following explains the downward slope of the aggregate demand curve?
a. disposable income remains unchanged when prices rise. b. higher domestic prices encourage exports and discourage imports. c. higher prices reduce the household’s real wealth. d. All of these.
Even though government spending and net exports in Country A has increased, its GDP has decreased. Which of the following statements is most likely to be true of the given scenario? a. Consumption expenditure in Country A has significantly increased. b. Consumption expenditure in Country A has significantly decreased. c. Investment expenditure in Country A has significantly increased
d. The number of new firms in every industry has increased in Country A.
The notion of interest sensitive consumption would be most readily observed when people buy
A. food. B. cars. C. insurance. D. higher education.
A decrease in money demand will shift the
A) IS curve to the left. B) IS curve to the right. C) LM curve to the left. D) LM curve to the right.