Charles purchases 20 basketball tickets per year when his annual income is $50,000 and 25 basketball tickets when his annual income is $60,000 . Charles's income elasticity of demand for basketball ticket is
a. 0.82, and basketball tickets are a normal good.
b. 0.82, and basketball tickets are an inferior good.
c. 1.22, and basketball tickets are a normal good.
d. 1.22, and basketball tickets are an inferior good.
c
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Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, price exceeds the firm's marginal and average variable costs. It follows that producing one more cupcake will cause this firm's
A. profits to decrease. B. total cost to decrease. C. profits to increase. D. profits to remain unchanged.