Author Question: If Pete raises his price of muffins from 2 to 3 and his sales revenue increases from 35,000 to ... (Read 31 times)

dollx · **on:** Jun 30, 2018

If Pete raises his price of muffins from 2 to 3 and his sales revenue increases from 35,000 to 38,000 . then:
a. the demand for Pete's muffins in this range is price elastic.
b. the demand for Pete's muffins in this range is price inelastic.
c. the demand for Pete's muffins in this range is unit elastic.
d. the percentage change in quantity demanded must exceed the percentage change in product price.
e. this is impossible since this would violate the law of demand.

Question 2

If a 10 percent cut in price causes a 15 percent increase in sales, then:
a. total revenue will decrease.
b. demand is price inelastic in this range.
c. demand is price elastic in this range.
d. demand is unit elastic in this range.
e. total revenue will remain the same.