A company currently sells 60000 units;1. A company currently sells 60,000 units a month at $10 per unit. The marginal cost per unit is $6. The company is considering raising the price by 10% to $11. If the price elasticity of demand is _______________ in that price range, then profit would increase if the company decided to raise the price by 10%.a. Equal to ?3;b. Greater than +1;c. Less than ?3.5;d. Greater than ?22. The price elasticity of demand for bread is ?0.5. If the price falls by 5%, the quantity demanded will change by;a. ?2.5%b. +2.5%c. ?1.0%d. +10%3. Actions a firm can take to change a product?s demand curve include:a. Reducing the price of a substitute product the firm also produces.;b. Reducing the price of a complementary product the firm also produces.;c. Differentiating its product from competitors by offering an extended warrantee.;d. All of the above will change a product?s demand curve.;4. A product can be classified as a normal good if an increase in the income of buyers causes:a.;A decrease in quantity demanded.;b. A decrease in demand.;c. An increase in demand.;d. An increase in quantity demanded.;5. Assume that beer and pretzels are complements in consumption, if the price of beer increases, we would expect to see;a. An increase in the demand for pretzels.;b. A decrease in the demand for pretzels.
Paper#29454 | Written in 18-Jul-2015Price : $25