6) Suppose an increase in symphony tickets prices reduces the total revenue. Thi

Question

6) Suppose an increase in symphony tickets prices reduces the total revenue. This is evidence that demand is: A. price elastic. B. price inelastic. 7) Consider the market for blcycles. If a dealer auts prices by 10 percent and sells 20 percent more bikes, then demand for bicycles is: A. inelastic, and total revenue will increase. B. elastic, and total revenue will increase C. inelastic, and total revenue will decrease. D. elastic, and total revenue will decrease. E. unit elastic, and total revenue will remain the same. 8) Roberto's Bakery reduces the price of wheat bread from $3 to $1 and finds that quantity demanded increases 100 to 120 loaves. Roberto calculates that his price elasticity of demand for wheat breed s A. 0 B. 0.2 C. 1.0 9) Suppose the quantity of steak purchased by the Lucas famly is 110 pounds pereofeand per year when the price is $2.10 elasticity for this family is: pound and 90 pounds per year when the price is $3.90 per pound. The price A. 0.39. B. 0.50. C. 1.00 D. E. 2.00 none of the above 10) Suppose the president of a textbook publisher argues that a 10 pereo increase in the price of textbooks will raise thinks that demand for textbooks is: revenue for the publisher. It can be concluded that the company president A elastc B. inelastic You are part of a local community theater g eamed through ticket sales. Mary says the obvious solution is to increase ticket prices. Is A Mary is correct if the demand for tickets is price inelastic. B. Mary is incorrect if the demand for tickets is price inelastic. C. Mary is correct. The increase in ticket prices wll always increase revenue. D. Mary is incorrect. The increase in ticket prices will never increase revenue E. Mary is incorrect. The way to increase revenue is to decrease ticket prices. 11) group. It is the goal of the group to increase the amount of revenue Mary correct? 12) S Valentine'sDay andJasonis desperately looking all over town for a dozen roses to give to Judy Most likely. Jason's price elasticity of demand is: A. greater than one B. less than one C. equal to one. Using the midpoints formula, what would be price elasticity of demand for a gallbladder operation if the number of operations fell from 6,000 to 4,000 per week after its price increased from $6,000 to $10,000? A. 0.80. B. 0.50. 13) D. E. 1.25 none of the above C. 0.25 14) If Florence, the hair stylist, raises the price of her cuts from $13 to $15 and finds the number of cuts falls from 300 to 260, then the demand for Florence's cuts in this range is: A price inelastic. B. price elastic C. unit elastic.

Explanation / Answer

Question 6

When increase in price of a good leads to increase in the total revenue and decrease in price of a good leads to decrease in the total revenue then demand for good is said to be inelastic.

When increase in price of a good leads to decrease in the total revenue and decrease in price of a good leads to increase in the total revenue then demand for good is said to be elastic.

In the given case, an increase in symphony ticket prices reduces the total revenue.

Thus, this is evidence that demand is price elastic.

Hence, the correct answer is the option (A).

Question 7

Percentage change (decrease) in price = -10%

Percentage change (increase) in quantity demanded = 20%

Calculate the price elasticity of demand -

Price elasticity of demand = % change in quantity demanded/% change in price

Price elasticity of demand = 20/-10 = -2

The price elasticity of demand is -2.

The value of the price elasticity of demand is more than 1.

So, demand for bicycles is elastic.

In case of elastic demand, decrease in price leads to increase in total revenue.

So,

Demand for bicycles is elastic, and total revenue will increase.

Hence, the correct answer is the option (B).

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