If a 1 percent increase in the price of DVD players leads to a 3 percent reduction in the number of DVD players sold, we can conclude that
A. the demand for DVD players is relatively inelastic.
B. the demand for DVD players is relatively elastic.
C. DVD players are inferior goods.
D. the supply of DVD players is perfectly inelastic.
Answer: B
You might also like to view...
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Suppose that, at the market clearing price of natural gas, the price elasticity of demand is -1.2 and the price elasticity of supply is 0.6. What will result from a price ceiling that is 10 percent below the market clearing price?
A More information is needed. B A shortage equal to 1.8 percent of the market clearing quantity C A shortage equal to 0.6 percent of the market clearing quantity D A shortage equal to 18 percent of the market clearing quantity E A shortage equal to 6 percent of the market clearing quantity
An import restriction ________ the market price and ________ the total surplus of the market.
A. increases; decreases B. increases; increases C. decreases; increases D. decreases; decreases
Which of the following countries is NOT involved in a free trade agreement with the U.S.?
A) China B) Australia C) Jordan D) Guatemala