When the Price of a Car Is $25,000,car Sales Are

question 97

Multiple Choice

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Since the demand for cars is ________,the car company can expect revenue to ________ when they increase the price of a car.

• A) inelastic; increase
• B) inelastic; decrease
• C) elastic; increase
• D) elastic; decrease

Understand and calculate the elasticity of demand and supply and its implications on market behavior.

Analyze the impact of external changes to demand or supply, such as changes in consumer preferences or technological improvements.

Understand the relationship between the elasticity of supply and demand and tax incidence.

Calculate and analyze deadweight loss resulting from taxes and how it affects overall market efficiency.

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Definitions:

Elements of Thought

The fundamental aspects or principles involved in the process of thinking, such as reasoning, problem-solving, and decision-making.

Perceptions

The process of organizing, identifying, and interpreting sensory information to represent and understand the environment or an element within it.

Naturalistic Observation

A research method in which subjects are observed in their natural environment without any manipulation by the experimenter.

Recycling Bins

Containers designated for the collection of recyclable materials, such as paper, plastic, and metal, to be processed and reused, contributing to environmental sustainability.