Suppose that the elasticity of demand for a product is 0.5. What will happen to total revenue as a firm increases the price?
A. Total revenue will increase.
B. Total revenue will decrease.
C. Total revenue will stay the same.
D. It cannot be determined from the information provided.
Answer: A
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With a rise in the stock market, the simple LCH model with no bequests predicts ________ in current consumption. Then when adding to the model bequests due to catastrophic illnesses and expenses that fail to occur, current consumption is ________
A) a fall, still predicted to fall B) a fall, predicted to rise C) no change, predicted to rise D) a rise, still predicted to rise E) a rise, predicted to remain unchanged
Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at a. prices at and above the equilibrium price
b. prices at and below the equilibrium price. c. prices above and below the equilibrium price, but not at the equilibrium price. d. the equilibrium price but not above or below the equilibrium price.
Which of the following comparisons of efficiency and equity is correct?
a) Efficiency deals with the size of the economic pie and equity deals with how fairly the pie is sliced. b) Equity can be judged on positive grounds, whereas efficiency requires normative judgments. c) Efficiency is more difficult to evaluate than equity. d) Equity and efficiency are both maximized in a society when total surplus is maximized.
Suppose that the only input used in the generation of solar energy is sunlight and has a zero cost. The average total cost of producing electricity is:
A. zero. B. equal to the marginal cost. C. equal to the average fixed cost. D. immeasurably high.