Suppose that at a price of $55, 100 units were sold while at a price of $33, 153 units were sold. Without calculating the price elasticity value, can you determine whether demand is elastic, unit elastic, or inelastic? Explain your answer
What will be an ideal response?
The first total revenue is ($55 ) × (100 ) = $5,500 while the second total revenue is ($33 ) × (153 ) = $5,049. Because total revenue decreased when price fell, demand must be inelastic.
Economics
You might also like to view...
The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage
A) does not apply to all workers. B) boosts the income of highly skilled workers. C) benefits only those workers who are able to find and keep a job. D) benefits nobody. E) cannot be enforced.
Economics
The minimum increase in government spending necessary to reach full employment is
A) $2,000 B) $1,000 C) $500 D) $200 E) $100
Economics