Suppose a Local Photographer Increases His Prices by 8 Percent

question 214

Multiple Choice

Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage.This set of facts indicates that the demand for his services is

• A) inelastic.
• B) elastic.
• C) unit elastic.
• D) perfectly elastic.
• E) perfectly inelastic.

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Definitions:

Revenue Streams

The various sources from which a business earns money.

Loss-Leader Pricing

A pricing strategy where a product is sold at a price below its market cost to stimulate other profitable sales.

Pro Forma Income Statement

A financial statement that projects a company’s revenues, expenses, and net income for a specific period in the future, based on assumptions.

Sponsored Content

A type of advertising medium where content is created and placed for the purpose of promoting a product, service, or brand, designed to blend in with the platform's natural content.