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Author Question: If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should: ... (Read 39 times)

khang

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on: Jun 30, 2018
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
 a. raise prices 1 percent.
  b. lower prices 1 percent.
  c. raise prices until the elasticity becomes very high.
  d. keep the price where it is.
  e. lower prices until the elasticity becomes very high.

Question 2

If a supplier faces a perfectly horizontal demand curve and sets his price slightly higher than the demand curve itself, he can expect:
 a. no change in his total revenues.
  b. everyone to begin buying his product.
  c. a complete loss of revenues.
  d. a new demand curve.
  e. a relative increase in income.


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kristenb95

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Reply #1 on: Jun 30, 2018
Answer to Question 1

d

Answer to Question 2

c


khang

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Reply 2 on: Jun 30, 2018
Gracias!

xiazhe

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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