If the percentage change in the quantity supplied of a good is less than the percentage change in price, then supply of the good is
A. . elastic.
B. . inelastic.
C. . normal.
D. . inferior.
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Suppose the cross-price elasticity of demand is a negative number. We know that
A. . the two goods are complements.
B. . the two goods are substitutes.
C. . the two goods are inferior goods.
D. . the two goods are normal goods.
The income elasticity of demand for good X is estimated to be -0.5. This suggests that good X is
A. . a complementary good.
B. . a substitute good.
C. . a normal good.
D. . an inferior good.
The local movie theater lowers admission prices in an attempt to increase its revenues. The managers of the theater must believe demand to be
A. . unit price elastic.
B. . perfectly price inelastic.
C. . price elastic.
D. . price inelastic.
Given that the demand for cocaine is inelastic, how will a reduction in supply affect total revenue of those selling this drug (other things equal)?
A. . Total revenue will rise.
B. . Total revenue will fall.
C. . Total revenue will not change.
D. . The effect on total revenue cannot be predicted.