Suppose that when the price of ginger ale is $2 per bottle, firms can sell 4 million bottles. When the price of ginger ale is $3 per bottle, firms can sell 2 million bottles. Which of the following statements is true?
a. The demand for ginger ale is income inelastic, so an increase in the price of ginger ale will increase the total revenue of ginger ale producers.
b. The demand for ginger ale is income elastic, so an increase in the price of ginger ale will increase the total revenue of ginger ale producers.
c. The demand for ginger ale is price inelastic, so an increase in the price of ginger ale will increase the total revenue of ginger ale producers.
d. The demand for ginger ale is price elastic, so an increase in the price of ginger ale will decrease the total revenue of ginger ale producers.
d
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Which of the following best describes a nation's Gross Domestic Product?
A) the market value of all goods and services produced in the economy, including intermediate goods B) the market value of all goods and services less depreciation C) the constant dollar value of all goods produced in the economy during a year period D) the total market value of all final goods and services produced in the economy during a year
In the business cycle, what immediately precedes the time when real GDP is falling?
A) depression B) peak C) recession D) expansion E) trough