Use the data in the table below to answer the following question.PriceQuantity Demanded$201218171620142412301036840644448The price elasticity of demand (based on the midpoint formula) when price decreases from $12 to $10 is
A. inelastic.
B. unit elastic.
C. elastic.
D. perfectly elastic.
Answer: C
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Adam Smith's ________ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole
A) survival of the fittest theory B) invisible hand C) Utopian society D) comparative advantage model
Refer to the figure above. The elasticity of supply for a product will be 2 when:
A. a 1 percent decrease in the price causes a 0.2 percent decrease in quantity supplied. B. a 1 percent decrease in price causes a 2 percent decrease in quantity supplied. C. a 2 percent decrease in price causes a 1 percent decrease in quantity supplied. D. a 2 percent decrease in price causes a 2 percent decrease in quantity supplied.
The profit maximizing rule MR = MC applies to:
A. perfectly competitive firms only. B. monopolists only. C. imperfectly competitive firms only. D. all firms.
Suppose that over one range of? prices, the absolute value of the price elasticity of demand varies from 15.0 to? 2.5, and over another range of? prices, the absolute value of the price elasticity of demand varies from 1.5 to 0.75. What can you say about total revenue and the total revenue curve over these two ranges of the demand curve as price? falls?
A. In the first case total revenue falls and in the second case total revenue falls. B. In the first case total revenue rises and in the second case total revenue rises. C. In the first case total revenue falls and in the second case total revenue falls and then rises. D. In the first case total revenue rises and in the second case total revenue rises and then falls. E. There is insufficient information to determine the effect on total revenue.