If a store increases its prices by 20% and its total revenue decreases by 10%, thedemand it faces in this price range must beperfectly inelasticperfectly elasticinelasticunit elasticelasticAssume that the supply of corn is relatively price inelastic, while the demand for cornis relatively price elastic. If the government imposes a per-unit excise tax on theproduction of corn, the incidence or burden of the tax will fallentirely on sellersequally on both buyers and sellersmore on buyers than on sellersentirely on buyersmore on sellers than on buyersThe absolute value of the price elasticity of demand for a good increases whenthe good has fewer substitutesthe price of an input used to produce the good increasesthe good becomes a necessityconsumers spend a greater portion of their budget on the goodthe good must be purchased as soon as the need arises (not possible to wait)OOOO

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If a store increases its prices by 20% and its total revenue decreases by 10%, the demand it faces in this price range must be perfectly inelastic perfectly elastic inelastic unit elastic elastic

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 8PA: The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase:...

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Question

If a store increases its prices by 20% and its total revenue decreases by 10%, the
demand it faces in this price range must be
perfectly inelastic
perfectly elastic
inelastic
unit elastic
elastic
Assume that the supply of corn is relatively price inelastic, while the demand for corn
is relatively price elastic. If the government imposes a per-unit excise tax on the
production of corn, the incidence or burden of the tax will fall
entirely on sellers
equally on both buyers and sellers
more on buyers than on sellers
entirely on buyers
more on sellers than on buyers
The absolute value of the price elasticity of demand for a good increases when
the good has fewer substitutes
the price of an input used to produce the good increases
the good becomes a necessity
consumers spend a greater portion of their budget on the good
the good must be purchased as soon as the need arises (not possible to wait)
O
O
O
O

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