A decrease in price:
A. does not change quantity demanded if demand is elastic.
B. does not cause a quantity effect when demand is perfectly inelastic.
C. causes a decrease in total revenue due to the quantity effect.
D. causes an increase in total revenue due to the price effect.
Answer: B
Economics
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If the quantity of money is $6 billion and nominal GDP is $9 billion, the velocity of circulation is
A) 0.67. B) 1.5. C) 36. D) 54. E) 3.
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There are a few firms in the automobile industry in Poorland. In order to prevent a price war, these firms have secretly agreed to charge a price 20% above the marginal cost of production. This is an example of ________
A) free riding B) undercutting C) collusion D) cost-cutting
Economics