Question 7 1 pts Cary did a survey and found out that the demand for his service

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Question 7 1 pts Cary did a survey and found out that the demand for his services was elastic; therefore OAn increase in price will increase total revenue. O A decrease in price will reduce total revenue. An increase in price will reduce total revenue ° A decrease in price will have no effect on total revenue. Question 8 1 pts Kim's Ice Cream shop found out that when they increase the price of the ice cream by fifteen percent that quantity demanded falls by five percent, the absolute value of the price elasticity will be 033 O not enough information to determine

Explanation / Answer

Ans 7)

If INcrease in price increases the revenue then demand for that good is inelastic and if increase in price decrease the total revenue then it seems that demand is elastic.

Option C is correct response

Ans 8)

Elasticity=% change in QUantity/% change in Price=5/15=0.33

Option A is correct response

Ans 5)

If the value of elasticity is less than 1 then it seems that demand is inelastic and if demand is inelastic then if Price increases would increase Revenue

Option B is correct

Ans 6)

It s just cumulative add previous marginal utility =20+19+15=54

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