Author Question: Last year, Alice bought 40 CDs when her income was 20,000 . This year, her income increased to ... (Read 91 times)

cmoore54 · **on:** Jun 30, 2018

Last year, Alice bought 40 CDs when her income was 20,000 . This year, her income increased to 25,000 . and she purchased 48 CDs. We can conclude that:
a. Alice's price elasticity of demand for CDs is equal to 1.
b. Alice's demand for CDs is price-inelastic.
c. Alice's demand for CDs is price-elastic.
d. the income elasticity of demand for CDs is negative.
e. CDs are a normal good.

Question 2

An economic profit of zero indicates a satisfactory situation for the firm.
a. True
b. False
Indicate whether the statement is true or false