6) Suppose an increase in symphony tickets prices reduces the total revenue. Thi
ID: 1138820 • Letter: 6
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 bicycles. If a dealer outs prices by 10 percent and sels 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 bread s .. B. 0.2 C. 1.0 9) Suppose the quantity of steak purchased by the Lucas family is 110 pounds per year yof demand for the price is $2.10 per this famity a: pound and 90 pounds per year when the price is $3.90 per pound. The price A 0.39 elastioty B. 0.50 D. E. 2.00 none of the above C. 1.00 10) Suppose the president of a textbook pubilisher argues that a 10 percent incent tnks demand for textbooks is: total revenue for the publisher. It can be concluded that the company president thinks A. elastic B. inelastic. 11) You are part of a local community theater group. It is the goal of the group to ticket prices. Is Mary correct? eaned through ticket sales. Mary says the obvious solution is to increase t 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 will 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. 12) It is Valentine's Day and Jason is 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. 13) Using the midpoints formula, what would be price elasticity of demand for a gallbladder operation if the number of operations fell from 6,00 to 4,000 per week after its price increased from $6,000 to $10,000? A 0.80. B. 0.50. D. 1.25 E. none of the above C. 0.25 14) f 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. A ou C. unit elastic.Explanation / Answer
6) Option A. Being elastic the tickets purchased decreases for increase in prices
7) Option B. As the bicycle is elastic and % change in quantity is more than change in price the revenue increases
8) Option B
P
Q
% change in P
% change in Q
Ed
3
100
1
120
-0.67
0.20
-0.30
9) Option E
P
Q
% change in P
% change in Q
Ed
2.1
110
3.9
90
0.86
-0.18
-0.21
10) Option B) Being inelastic the revenue would increase for the increase in price
11) Option A
12) Option A
13) Option B
P
Q
% change in P
% change in Q
Ed
6000
6000
10000
4000
0.67
-0.33
-0.50
14) Option B
P
Q
% change in P
% change in Q
Ed
13
300
15
260
0.15
-0.13
-0.87
P
Q
% change in P
% change in Q
Ed
3
100
1
120
-0.67
0.20
-0.30
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