Your Younger Sister Needs $80 to Buy a New Longboard

question 36

Multiple Choice

Your younger sister needs $80 to buy a new longboard.She has opened a lemonade stand to make the money she needs.She currently is charging $1 per cup,but wants to adjust her price to earn the money faster.What is your advice to her

• A)If the demand for lemonade is perfectly elastic, leave the price the same and be patient.
• B)If the demand for lemonade is elastic, raise the price to increase total revenue.
• C)If the demand for lemonade is elastic, lower the price to increase total revenue.
• D)If the demand for lemonade is inelastic, lower the price to increase total revenue.

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Definitions:

GST

Goods and Services Tax, a value-added tax imposed on most goods and services sold for domestic consumption.

PST

PST stands for Provincial Sales Tax, which is a tax levied by individual provinces in Canada on the sale of goods and services.

Property Taxes

It is a levy imposed by a government on a property owner, usually based on the value of the property.

Mill Rate

The amount of tax payable per dollar of the assessed value of property, used in calculating property taxes.