Which of the following describes a situation in which demand must be inelastic?
A. Total revenue decreases by 10 percent when the price of spats rises by 10 percent.
B. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent.
C. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent.
D. Total revenue decreases by $10 when the price of spats rises by $10.
Answer: C
Economics
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Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $700; AVC = $500; MC = $600; MR = $600. The firm should
A) increase output. B) decrease output. C) continue to produce its current output. D) shut down.
Economics