If a 10 percent cut in the price of video rentals at "That's Rentertainment" causes a 15 percent increase in the quantity of rentals demanded, then
a. total revenue will decrease
b. demand is price inelastic within that price range
c. demand is price elastic within that range
d. demand is unit elastic within that range
e. total revenue will remain the same
C
You might also like to view...
Holding other factors constant, if the retirement of many in people in the post-war baby boom generation reduces the portion of the population is the labor force, then the real wages of workers will ________ and employment of workers will ________.
A. increase; increase B. decrease; not change C. decrease; increase D. increase; decrease
Now find the cost-effective solution.
Consider the environmental problem created by two paint companies that release chromium wastes into a nearby stream. The state authorities set a standard for the waterway that requires a combined abatement level (A) for chromium of 15 units. Suppose that the two firms, firm 1 and firm 2, face the following marginal abatement cost equations: MAC1 = 3.2A1 and MAC2 = 0.8A2, where costs are measured in thousands of dollars.
An increase in oil prices will shift the aggregate:
a. demand curve leftward. b. demand curve rightward. c. supply curve leftward. d. supply curve rightward.
The purpose of expansionary fiscal policy is to
a. increase output b. prevent hyperinflation c. slow the growth of the GDP d. increase the separation between government and private industry