If Pete Raises His Price of Muffins from $2 to $3

question 121

Multiple Choice

If Pete raises his price of muffins from $2 to $3 and his total revenue increases from $35,000 to $38,000, then:

• A) the demand for Pete's muffins in this range is elastic.
• B) the demand for Pete's muffins in this range is inelastic.
• C) the demand for Pete's muffins in this range is unit elastic.
• D) the percentage change in quantity demanded must exceed the percentage change in product price.

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Definitions:

Limited Partnership

A form of business organization that has one or more general partners who manage the business and have unlimited liability for the obligations of the business and one or more limited partners who do not manage and have limited liability.

Limited Liability Status

A legal status which limits the amount of financial loss and legal liability an individual's investment can incur to the amount invested in a corporation, protecting personal assets from company debts and obligations.

Limited Liability Partnership

A partnership where some or all partners have limited liabilities, protecting them from certain debts or obligations beyond their investment.

General Partners

Parties in a partnership who are responsible for the management of the partnership and are personally liable for its debts.