If the demand faced by a firm is elastic, selling one less unit of output will:
a. increase revenue.
b. decrease revenue.
c. keep revenues constant.
d. decrease price.
b
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Which of the following contributes most to the fluctuations of growth and decline that characterize business cycles?
a. consumption b. investment c. government purchases d. next exports
In the Keynesian model, consumption depends on:
A. the natural rate of unemployment. B. potential output. C. disposable income. D. whether the government has a budget surplus or deficit.
Suppose that you and two friends have an opportunity to purchase a pizza restaurant. Each of you would put up $75,000 . The revenue from the restaurant is expected to remain $200,000 per year for the next several years
The costs (not including the opportunity costs of your investment) of operating the restaurant are expected to remain steady at $185,000 for the next several years. The current market rate of interest is 7 percent per year. Should you go in on this deal? Explain.
If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller. This phenomenon is due to
A) moral hazard. B) economically irrational behavior. C) gains from trade. D) adverse selection.