Refer to the above figure. A movement from point A to point B indicates

Moody's Investors Service is able to make a profit because

A) most investors are irrational. B) of the existence of adverse selection problems. C) fluctuations in interest rates make default risk on corporate bonds difficult to gauge. D) small investors like the mutual funds they sell.

An owner of local salon realized that by decreasing the prices for haircuts, his revenue increased. This implies that

a. The demand for haircuts is elastic b. The demand for haircuts is inelastic c. The demand for haircuts is unitary elastic d. The demand for haircuts is perfectly elastic