A government wants to reduce electricity consumption by 10%. The price elasticity of demand for electricity is -5. The government must ________ the price of electricity by ________.
A. raise; 1.25%
B. raise; 2.0%
C. lower; 0.5%
D. raise; 0.5%
Answer: B
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Suppose that ABC Industries, a perfectly competitive firm, currently produces 500 units of imitation ham spread for a total cost of $1,500 . The marginal cost of the 500th unit is $20, and the marginal revenue of the 500th unit is $15 . To maximize profits, Cheapo Industries should:
a. continue to produce 500 units. b. produce more than 500 units but less than 1500 units. c. produce less than 500 units. d. produce more than 1500 units. e. stop producing at 500 units.
(Consider This) A direct cost of going to college is:
A. tuition, while an indirect cost (opportunity cost) is books and other supplies. B. forgone income while in college, while an indirect cost (opportunity cost) is tuition. C. tuition, while an indirect cost (opportunity cost) is forgone income while in college. D. books and supplies, while an indirect cost (opportunity cost) is food and housing.