Suppose That a Coffee Shop Faces a Demand Curve That

question 166

Multiple Choice

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment,demand becomes ________ elastic and total revenue ________.

• A) more; decreases
• B) more; increases
• C) less; increases
• D) less; decreases

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Definitions:

Agency by Ratification

The process where a principal approves and legitimizes the unauthorized acts done by an agent on their behalf, thereby giving these actions full legal effect.

Liability

Legal responsibility for one's actions or omissions, which may result in the obligation to pay damages or perform specific actions.

Instructions

Directions or orders given by one party to another, especially in the context of executing a task or procedure.

Purchase Price

The amount of money paid to buy a product or service.