Shaina and Mariah have a business that provides personal fitness training services. They know that after raising their prices from $50 to $75 per hour, the quantity of hours they spent delivering training services fell from 90 to 80 hours per week. The demand for their services is:
a. inelastic, with a price elasticity coefficient greater than one.
b. inelastic, with a price elasticity coefficient less than one.
c. elastic, with a price elasticity coefficient greater than one.
d. elastic, with a price elasticity coefficient less than one.
b
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Money demand is given by Md/P = 1000 + .2Y - 1000i. Given that P = 200, Y = 2000, and i = .10, real money demand is equal to
A) 1300. B) 1500. C) 260,000. D) 300,000.
Which of the following theories fails to explain persistent unemployment?
A) classical theory B) Friedman and Phelps fooling theory C) new Keynesian theory D) Both A and B are correct.
The principle of comparative advantage states that
a. whoever has a comparative advantage in producing a good or service also has the absolute advantage b. whoever has an absolute advantage in producing a good or service also has the comparative advantage c. whoever can produce a good or service using fewer resources than another individual has the comparative advantage d. total production of every good or service can be greater if individuals specialize according to their comparative advantage e. comparative advantage is maximized if each individual specializes according to his or her absolute advantage
Refer to the above figure. Unexpected contractionary monetary policy has caused the aggregate demand curve to shift to AD2. In the short run
A. real GDP will be Y2, and the price level will be P2. B. real GDP will be between Y1 and Y2, and the price level will be below P2. C. real GDP will be Y1, and the price level will be P1. D. real GDP will be between Y1 and Y2, and the price level will be above P1.