From a firm's point of view, when the demand for a good has a price elasticity of 0.5, then, all things remaining the same, a(n):
A) increase in the price of the good will decrease the firm's revenue.
B) increase in the price of the good will increase the firm's revenue.
C) change in the price of the good will not affect the firm's revenue.
D) change in the price of the good will not affect the quantity of the good demanded by consumers.
B
You might also like to view...
Which Fed policy would be part of a restrictive monetary policy?
A) Raising tax rates. B) Lowering the discount rate. C) Selling government bonds. D) Reducing the required reserve ratio. E) None of the above.
Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. Which of the following will happen in the short run?
A) Unemployment will decline. B) The aggregate demand curve will shift to the left. C) Output will decline. D) Prices will decline.