When the Local Used Bookstore Prices Economics Books at $15

question 380

Multiple Choice

When the local used bookstore prices economics books at $15.00 each,it generally sells 70 books per month.If it lowers the price to $7.00,sales increase to 90 books per month.Given this information,we know that the price elasticity of demand for economics books is about

• A) 2.91,and an increase in price from $7.00 to $15.00 results in an increase in total revenue.
• B) 2.91,and an increase in price from $7.00 to $15.00 results in a decrease in total revenue.
• C) 0.34,and an increase in price from $7.00 to $15.00 results in an increase in total revenue.
• D) 0.34,and an increase in price from $7.00 to $15.00 results in a decrease in total revenue.

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Definitions:

Federal Government Revenues

The income received by the federal government from various sources, such as taxes, fees, and investments.

Individual Income Tax

A tax levied on the income of individuals, including wages, salaries, and investment returns.

Clothing Tax

A specific tax imposed on the sale or purchase of clothing, which can vary by jurisdiction.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to tax.