If demand is price inelastic,
a. price and total revenue change in opposite directions
b. a seller should decrease the price to increase total revenue
c. too few goods are being produced from society's point of view
d. price and total revenue change in the same direction
e. the market can never be in equilibrium
D
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Suppose that a market basket of two goods is changed by adding more of one of the goods and subtracting one unit of the other. The consumer will:
A) rank the market basket more highly after the change. B) rank the market basket more highly before the change. C) rank the market basket just as desirable as before. D) any one of the above statements may be true.
By which of the following methods could a supplier identify its good as a plum to a skeptical buyer?
A. money-back guarantee B. warranties and repair guarantees C. a verbal assurance D. both money-back guarantee and warranties and repair guarantees
Entry of new firms in an increasing-cost industry leads to an upward shift of the LRAC curve.
Answer the following statement true (T) or false (F)
A market based firm
A) still needs structure. B) needs no structure. C) is really not a firm. D) none of these choices.