A Miami Restaurant Has Created Atmosphere Through Its Subtle Use

question 140

Multiple Choice

A Miami restaurant has created atmosphere through its subtle use of blue and green lighting, ceiling fans over each table, and frozen drinks. If its electrical energy supplier raises its prices, the restaurant will most likely ________.

• A) continue its present operation because it has an elastic demand for electricity
• B) ask other Miami restaurants to create a derived demand for cheaper electricity
• C) decide to find other ways to use electricity
• D) continue its present operation because it has an inelastic demand for electricity
• E) remove its lighting, turn off its fans, and economize on its use of electricity

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Definitions:

Capital

Assets or money possessed by an individual or organization, which can be used for initiating a business or investment purposes.

Marginal Rate

The additional cost or benefit associated with producing or consuming one additional unit of a good or service.

Transformation

The process of changing or converting one form or state of something into another, often seen in manufacturing and industry.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to consume or produce one good or service over another.