Suppose That a Coffee Shop Faces a Demand Curve That

question 18

Multiple Choice

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment:

• A)the demand becomes more elastic and the total revenue decreases.
• B)the demand becomes less elastic and the total revenue decreases.
• C)the demand becomes less elastic and the total revenue increases.
• D)the demand becomes more elastic and the total revenue increases.

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