A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?
A) Demand is elastic.
B) Demand is unit elastic.
C) Demand is inelastic.
D) Demand is perfectly elastic.
E) Not enough information is given to conclude anything about price elasticity of demand.
B
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The currently used method for calculating the CPI
A) accounts for people increasing consumption of a good that falls in relative price. B) probably overstates inflation by about 1 percentage point. C) has no effect on government expenditures. D) None of the above answers are correct.
Which of the following statements provides the best description of one reason why regulation of an industry might not increase economic efficiency?
a. There are more employees of regulated industries than affected customers. b. Insufficient regulator pay makes it difficult to hire effective regulators. c. The regulated industry has stronger incentives to be involved in the regulation process than the general publi c. d. Regulated industries have too much economic power and can litigate away most regulation.