Suppose That a Jewelry Store Found That When It Increased

question 17

Multiple Choice

Suppose that a jewelry store found that when it increased prices by 10 percent, sales revenue increased by 3 percent. Which of the following is true about the price elasticity of demand for the store's goods?

• A) Demand is perfectly inelastic.
• B) Demand is inelastic, but not perfectly.
• C) Demand is perfectly elastic
• D) Demand is elastic, but not perfectly.

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Definitions:

Federal Tax

A tax levied by the federal government on income, corporate profits, and other aspects of the financial activity within a country.

Cigarettes

are small cylinders of finely cut tobacco leaves rolled in thin paper for smoking, often containing chemical additives.

Indirect and Regressive

Pertaining to taxes that are the same rate for all, regardless of income, often resulting in a higher tax burden on lower-income individuals compared to higher-income ones.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting, which does not necessarily align with the calendar year.