Assume Pyrotex Inc

question 15

Multiple Choice

Assume Pyrotex Inc. estimates the demand for its fireworks to be linear. If the current price charged by Pyrotex is such that the elasticity of demand is equal to 2.5, which of the following statements is true?

• A) Pyrotex will increase its revenues by decreasing the price of fireworks.
• B) Pyrotex will increase its revenues by increasing the price of fireworks.
• C) Pyrotex cannot increase its revenues by changing the price of fireworks.
• D) Not enough information is provided to determine whether or not Pyrotex is currently maximizing its profits.

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Definitions:

Abstraction

Is the ability to create general concepts that meaningfully organize sensory experience.

Communication

The process of transferring information, ideas, and feelings from one entity or group to another through the use of mutually understood signs, symbols, and language.

High Culture

Is enjoyed mainly by upper classes.

Popular Culture

Is enjoyed by all classes.