Table 61
the Publisher of a Magazine Gives His Staff the the Following

question 122

Multiple Choice

Table 6.1
The publisher of a magazine gives his staff the following information:
$\begin{array}{|l|l|}\hline \text { Current price } & \$ 2,00 \text { per issue } \\\hline \text { Current sales } & 150,000 \text { copies per month } \\\hline \text { Current revenue } & \$ 300,000 \text { per month } \\\hline \text { Current total costs } & \$ 450,000 \text { per month } \\\hline\end{array}$
He tells the staff, "Our costs are currently $150,000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost."
-Refer to Table 6.1.Which of the following statements is correct?

• A)The publisher's analysis is correct only if the demand is perfectly elastic.
• B)The publisher's analysis is correct only if the demand is elastic.
• C)The publisher's analysis is correct only if the demand is perfectly inelastic.
• D)The publisher's analysis is correct only if the demand is unit-elastic.

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Definitions:

Authorize

To give official permission or power to do something.

Bank Statement

A document provided by a bank that summarizes an account holder's financial transactions over a specified period.

Unauthorized Check

An unauthorized check is a check that has been written and signed without the permission or authority of the account holder, often considered a form of fraud.

Reimburse

The act of compensating someone for money spent or costs incurred on someone else's behalf.