Suppose That When the Price of Ginger Ale Is $2

question 44

Multiple Choice

Suppose that when the price of ginger ale is $2 per bottle,firms can sell 4 million bottles.When the price of ginger ale is $3 per bottle,firms can sell 2 million bottles.Which of the following statements is true?

• A)The demand for ginger ale is income inelastic,so an increase in the price of ginger ale will increase the total revenue of ginger ale producers.
• B)The demand for ginger ale is income elastic,so an increase in the price of ginger ale will increase the total revenue of ginger ale producers.
• C)The demand for ginger ale is price inelastic,so an increase in the price of ginger ale will increase the total revenue of ginger ale producers.
• D)The demand for ginger ale is price elastic,so an increase in the price of ginger ale will decrease the total revenue of ginger ale producers.

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Definitions:

Scientific Method

a systematic approach to research and experiment that involves observation, hypothesis formation, experimentation, and the analysis of data to reach conclusions.

Testable Hypothesis

A statement that makes a specific prediction that can be verified or falsified through experimentation or observation.

Research Method

The systematic approach, technique, or way of planning and conducting scientific investigations in any given field of study.

Scientific Theories

Well-substantiated explanations of some aspect of the natural world, based on a body of facts that have been repeatedly confirmed through observation and experiment.