Suppose That a Local Dry Cleaner Shop Faces a Demand

question 31

Multiple Choice

Suppose that a local dry cleaner shop faces a demand curve that is liner and that the current price for its garments is set at a point where the price elasticity of demand is 1.7.If the local dry cleaner shop increases the price per garment,demand becomes ________ elastic and total revenue ________.

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

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Definitions:

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