When a University Bookstore Prices Chemistry Textbooks at $200 Each,it

question 301

Multiple Choice

When a university bookstore prices chemistry textbooks at $200 each,it generally sells 120 books per month.If it lowers the price to $160,sales increase to 160 books per month.Given this information,we know that the price elasticity of demand for chemistry books is about

• A)1.29,and a decrease in price from $200 to $160 results in an increase in total revenue.
• B)1.29,and a decrease in price from $200 to $160 results in a decrease in total revenue.
• C)0.78,and a decrease in price from $200 to $160 results in an increase in total revenue.
• D)0.78,and a decrease in price from $200 to $160 results in a decrease in total revenue.

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Definitions:

Principle of Neutrality

In economic policy, it suggests that decision-making and interventions should not favor any particular market outcome or resource allocation.

Economic Decisions

Choices made by individuals, businesses, or governments regarding the allocation of resources and the distribution of goods and services.

Total Burden

The full impact or total effect of something, often used in economics to refer to the combination of direct and indirect costs associated with a policy or tax.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually do pay.