Shari and Mary have a business that provides personal fitness training services. They know that after raising their prices from $40 to $60 per hour, the quantity of hours they spent delivering training services fell from 90 to 50 hours per week. The demand for their services is:
a. inelastic, with a price elasticity coefficient greater than one.
b. inelastic, with a price elasticity coefficient less than one.
c. elastic, with a price elasticity coefficient greater than one.
d. elastic, with a price elasticity coefficient less than one.
c
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Suppose you borrow $5,000 at an interest rate of 8%. If the expected real interest rate is 3%, then the rate of inflation over the upcoming year that would be most beneficial to you would be
A) 0%. B) greater than 0% but less than 5%. C) equal to 5%. D) greater than 5%.
The most effective redistribution programs provide assistance to the hard core poor and transitory assistance to the marginal poor without _____
a. creating dependency on welfare payments b. costing taxpayers too much c. changing the behavior of individuals d. a and c