Sam owns a taco restaurant, and he conducted a consumer survey that indicates that the price elasticity of demand for his restaurant is 3.5. You would advise Sam to
A. Lower his price to increase revenue.
B. Keep his price the same to maximize revenues.
C. Offer more high-priced products.
D. Raise his price to increase revenues.
Answer: A
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Real GDP per capita
A. necessarily grows more rapidly than real GDP. B. cannot grow more slowly than real GDP. C. cannot grow more rapidly than real GDP. D. can grow either more slowly or more rapidly than real GDP.
Suppose the total market value of all the final goods and services produced in the country of Rushya was $8 billion in 2008 (measured in 2008 prices) and $9 billion in 2009 (measured in 2009 prices). Which of the following statements is definitely correct?
A. Real GDP increased in Rushya between 2008 and 2009. B. Average price levels increased in Rushya between 2008 and 2009. C. Production increased in Rushya between 2008 and 2009. D. Whether real GDP increased cannot be determined with the information given.
Suppose that a monopolistically competitive market is in its long-run equilibrium. If the market demand curve shifts to the left due to a recession:
A. the number of firms in the market decreases in the short run. B. some firms may earn negative profits in the short run. C. firms' average costs of production decreases as they decrease output levels in the short run. D. None of these
Refer to the information. If the per-unit price of raw materials rises from $4 to $8 and all else remains constant, the per-unit cost of production will rise by about:
Answer the question on the basis of the following information. An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. A. 100 percent. B. 50 percent. C. 40 percent. D. 30 percent.