Which of the following statements is true?
a. The demand for tobacco products tends to be elastic.
b. Total revenue is maximized when price elasticity of demand is one.
c. Goods are said to be price inelastic when the elasticity is greater than two.
d. The demand for milk is more elastic than the demand for luxury travel cruises.
e. The demand for 5-cent candy is more elastic than the demand for Irish lace tablecloths.
B
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A debtor nation means a nation
A) whose imports exceeds its exports. B) whose current account is less than its capital account. C) who—through its history—has invested less in the rest of the world than other countries have invested in it. D) whose current lending to the rest of the world exceeds its borrowing from the rest of the world.
When wages and prices are completely flexible ________
A) inflation is determined by expected inflation and price shocks B) labor hoarding occurs C) unemployment is disconnected from the real economy D) all of the above E) none of the above