Figure: the Linear Demand Curve

question 128

Essay

Figure: The Linear Demand Curve
(Figure: The Linear Demand Curve) Look again at the figure The Linear Demand Curve.If you currently sell scarves at $7 and you increase the price to $8, your total revenue will ,
and you notice that your price elasticity of demand is _.
A.increase; elastic
B.decrease; elastic
C.increase; inelastic
D.decrease; inelastic

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Definitions:

Market Wage Rate

The prevailing rate of pay for a particular job in a specific market or geographical area.

Employ

To hire or use the services of someone or something for a particular purpose or job.

Profit-maximizing

The process by which a firm determines the price and output level that returns the maximum profit.

Labor

Labor is the effort that people contribute to the production of goods and services, measured in terms of time worked, skill level, and productivity.