Which of the following describes a situation in which demand must be inelastic?
a. Total revenue decreases by 10 percent when the price of spats rises by 10 percent.
b. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent
c. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent.
d. Total revenue decreases by $10 when the price of spats rises by $10.
e. Total revenue decreases by more than $10 when the price of spats rises by $10.
C
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Indicate whether the statement is true or false
An economic analysis of "planned obsolescence" shows that
a. monopolies have an incentive to produce shorter-lived products, even when longer-lived products can be produced at the same cost. b. firms prefer to produce shorter-lived products, because these result in greater sales and hence larger profits. c. competitive firms are forced to produce the product with greatest longevity, but monopolies can successfully use planned obsolescence. d. firms will make a longer-lived product if the additional cost is less than the present value of the benefits received by consumers.