When the price elasticity of demand is calculated, if price increases, quantity demanded decreases and if price decreases, quantity demanded increases so the result will be
a. positive when price increases and negative when it decreases
b. negative when price increases and positive when it decreases
c. greater than one when price increases and less than one when it decreases
d. less than one when price increases and greater than one when it decreases
e. negative whether we look at a price increase or decrease
E
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At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that
A) there are more people who like vanilla ice cream than there are people who like chocolate ice cream. B) the demand for chocolate ice cream is inelastic. C) the demand for chocolate ice cream is elastic. D) None of the above answers is correct.
In the above table, between what two levels of output does one first observe the law of diminishing returns?
A) 0 and 1000 B) 1000 and 3000 C) 3000 and 4000 D) 4000 and 4500