Figure 7-13
Refer to . If price increases from $10 to $15, total revenue will
a.
increase by $20, so demand must be inelastic in this price range.
b.
increase by $5, so demand must be inelastic in this price range.
c.
decrease by $20, so demand must be elastic in this price range.
d.
decrease by $10, so demand must be elastic in this price range.
a
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Necessities, such as food and shelter, are product purchases that consumers are sensitive to, so the demand is elastic for these goods.
Answer the following statement true (T) or false (F)
To understand what causes the business cycle, leading variables alone are of interest. Coincident and lagging variables merely display the consequences of changes in the economy. Respond
What will be an ideal response?
Suppose that a firm produces both steel and electricity. It is cheaper for this firm to produce both goods than it would be if they were produced by two separate firms. Further, as this firm increases its production levels of both products, the average cost of producing steel rises, while the average cost of producing electricity remains constant. This firm experiences:
A. economies of scope, diseconomies of scale in the production of steel and constant returns to scale in the production of electricity. B. economies of scope, economies of scale in the production of steel and constant returns to scale in the production of electricity. C. diseconomies of scope, economies of scale in the production of steel and constant returns to scale in the production of electricity. D. diseconomies of scope, diseconomies of scale in the production of steel and increasing returns to scale in the production of electricity.
When the money market is drawn with the value of money on the vertical axis, an increase in the money supply shifts the money supply curve to the
a. right, lowering the price level. b. right, raising the price level. c. left, raising the price level. d. left, lowering the price level.