A Government Wants to Reduce Electricity Consumption by 10

question 135

Multiple Choice

A government wants to reduce electricity consumption by 10%. The price elasticity of demand for electricity is -5. The government must ________ the price of electricity by ________.

• A) raise; 2.0%
• B) raise; 0.5%
• C) raise; 1.25%
• D) lower; 0.5%

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Definitions:

Sales Revenue

The total income received from selling goods or services before any expenses are subtracted.

Other Revenues

Income from activities that are not part of a company's core business operations.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.

Goodwill

An intangible asset representing the excess of the purchase price over the fair market value of an acquired company’s net assets.