If the absolute price elasticity of demand of a good is 1.8, then the total revenues will increase if its market price
A) increases.
B) decreases.
C) stays the same.
D) changes, but we can't tell without more information if the price increases or decreases.
Answer: B
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The main policy tool for manipulating consumer spending is personal income tax, but this tool takes time to have an effect.
Answer the following statement true (T) or false (F)
John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the table below:Hours PerDay CleaningWindowsTotal Numberof WindowsCleaned0017211314416517What is the lowest price per window that John would be willing to accept to spend 4 hours per day cleaning windows?
A. $2 B. $11 C. $3.50 D. $7