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If demand is price inelastic,

a. price and total revenue change in opposite directions b. a seller should decrease the price to increase total revenue c. too few goods are being produced from society's point of view d. price and total revenue change in the same direction e. the market can never be in equilibrium

Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.10 = 1 peso. Furthermore, suppose the price level in the United States rises 15 percent at a time when the Mexican price level is stable. According to the purchasing power parity theory, what will be the new equilibrium exchange rate?

A) $0.085 = 1 peso B) $0.13 = 1 peso C) $0.15 = 1 peso D) $0.115 = 1 peso E) none of the above