Question

#1: A bookstore's price elasticity of demand is -2.5 and it should therefore raise the price level of its product in order to maximize total revenue. Yes or No? #2: A firm is facing an inelastic demand curve and it should therefore raise the price level of its product in order to maximize total revenue. Yes or No? #3: If a firm's percentage change in quantity demanded is greater than percentage change in the price level, it is encountering an inelastic demand and it should raise the price level of its product in order to maximize total revenue. Yes or No? #4: The area under a firm's demand curve is total profit. Yes or No? #5: IBM's price elasticity of demand is -1.25; and last year it sold 4,600 units of its high-end laptop at $2,500 each. Due to the rising cost of production in 2023 by approximately 7.5%, the company expects units sold to go down by how many percent? Answer in percentage. #6: Using information in #5 above, the company expects to be able to sell how many units in 2023? Answer in units. #7: What is a firm's price elasticity of demand IF its demand curve is perfectly inelastic? #8: To maximize total revenue, a firm should keep producing until its price elasticity of demand is WHAT number? #9: As one moves down along a straight-line downward-sloping demand curve, price elasticity of demand changes from Elastic to Unitary Elastic to Inelastic. True or False? 10: One of the determinants of price elasticity of demand is the "availability of close substitutes. The more the substitutes a product has, the greater the degree of elasticity. True or False

#1: A bookstore's price elasticity of demand is -2.5 and it should therefore raise the price level of its product in order to maximize total revenue. Yes or No?
#2: A firm is facing an inelastic demand curve and it should therefore raise the price level of its product in order to maximize total revenue. Yes or No?
#3: If a firm's percentage change in quantity demanded is greater than percentage change in the price level, it is encountering an inelastic demand and it should raise the
price level of its product in order to maximize total revenue. Yes or No?
#4: The area under a firm's demand curve is total profit. Yes or No?
#5: IBM's price elasticity of demand is -1.25; and last year it sold 4,600 units of its high-end laptop at $2,500 each. Due to the rising cost of production in 2023 by
approximately 7.5%, the company expects units sold to go down by how many percent? Answer in percentage.
#6: Using information in #5 above, the company expects to be able to sell how many units in 2023? Answer in units.
#7: What is a firm's price elasticity of demand IF its demand curve is perfectly inelastic?
#8: To maximize total revenue, a firm should keep producing until its price elasticity of demand is WHAT number?
#9: As one moves down along a straight-line downward-sloping demand curve, price elasticity of demand changes from Elastic to Unitary Elastic to Inelastic. True or False?
10: One of the determinants of price elasticity of demand is the "availability of close substitutes. The more the substitutes a product has, the greater the degree of
elasticity. True or False

Added by Mario M.

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