Suppose the absolute value of the price elasticity of demand for meals at Fortune Buffet House is ?. What happens to sales revenue if the restaurant increases its price by 5 percent?
A) Sales revenue falls by less than 5 percent.
B) Sales revenue remains unchanged.
C) Sales revenue falls by 100 percent.
D) It cannot be determined without information on prices.
Answer: C
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The textbook asserts that banks create money themselves. How?
A) Banks have their own printing presses, which is permitted by the Fed. B) Banks are allowed to reach well into their required reserves as long as they can demonstrate that it would be profitable to do so. C) Banks, when lending out their excess reserves, unleash a process that can increase the money supply through the deposit expansion multiplier. D) For all of the above reasons.
At an equilibrium price, quantity demanded
a. exceeds quantity supplied. b. equals quantity supplied. c. is less than quantity supplied. d. Any of the above is possible.