Question

23. Rank the price elasticity of demand from most ed from most elastic to least elastic for the following three Orowing three items: Alcoholiehavares all beer, and Molson Canadian be A Molson canadian beer all beer alcoholic beverages b. All beer, alcoholic beverages Molson Canadian beer C. Alcoholic beverages all beer Molson Canadian beer d. All beer. Molson Canadian beer alcoholic beverages 24. Which of the following could explain why the deman inelastic? wing could explain why the demand for table salt is price a. Salt is a luxury for all consumers. b. Salt is a rare commodity. c. Salt is an inferior good. mers devote a very small portion of their total income to salt purchases. 25. Steven's Soup Sensations knows that the nows that the price elasticity of demand for its 7.62 (in absolute value). What happens to Steven's Soup Sensations' sales revenue if it increases the price of its canneds -d. It falls. c. It rises by 1.62 percent. b. It falls by 162 percent. d. It rises. 26. Assume that you own a small boutique hotel. In a own a small boutique hotel. In an attempt to raise revenue you your daily rates by 20 percent. However, your revenue falls. What does this indicate about the demand for your boutique hotel rooms a The demand curve for your hotel rooms is vertical. b. Demand is inelastic. c. Boutique hotel rooms are inferior goods. d. Demand is elastic. 27. A new business owner states: "The only way to increase one's revenue selling a product is to increase the product's price." This statement 15 a Not true. Revenue will always decrease as the price of the product increases because quantity demanded will fall. b. Always true. c. Not true. Revenue will increase as the price of the product increases only if demand is elastic. d. Not true. Revenue will increase as the price of the product increases only if demand is inelastic. a hucim

Answer 1

Answer.

23. A demand for a good is said to be more elastic when the change in quantity demanded is more than change in price. A particular brand of alcohol seems to be more elastic than whole range of beer. As a particular brand may have more close substitutes available. Similarly the demand for all beer can be more elastic than alcohol beverages.

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