A grocery store put LT\'s Coconut Water on sale (decrease in price) and found th

Question

A grocery store put LT's Coconut Water on sale (decrease in price) and found that total revenues incresed.This can be explained by which of the following? 1 pts O The demand is elastic O The demand is horizontal O The demand is inelastic O The demand is vertical 1 pts D Question 25 Which of the following is an example of a product that is nonexcludable and rival? O A fishing pond; which does not require a paid permit. O National Defense O the light rail system in Houston O getting a degree from HCC

Explanation / Answer

Question 1

In given case, decrease in price of product has resulted in an increase in the total revenue.

When decrease in price of a good leads to an increase in total revenue and vice-versa then in such case demand for good is said to be elastic.

So,

In the given case, the demand is elastic.

Hence, the correct answer is the option (1) [The demand is elastic].

Question 2

A non-excludable and rival good implies a good from whose consumption nobody can be excluded but whose consumption by one reduces the quantity available for others to consume.

In case of fishing pond, nobody can be excluded from fishing in it as no permit is required.

However, fishing by one reduces the quantity of fish available for others.

So, fishing pond is an example of a product that is non-excludable and rival.

Hence, the correct answer is the option (1) [A fishing pond, which does not require a paid permit].

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