When Demand for a Product Is Inelastic and Prices Are

question 65

Multiple Choice

When demand for a product is inelastic and prices are increased, usually demand will:

• A)increase, and operating profits will increase
• B)remain the same, and operating profits will increase
• C)decrease, and operating profits will decrease
• D)remain the same, and operating profits will decrease

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Definitions:

Pizza

A popular dish of Italian origin, consisting of a round, flattened base of leavened wheat-based dough topped with tomatoes, cheese, and various other ingredients, baked at a high temperature.

Books

Bound printed works consisting of written or illustrated pages, typically used for reading or study.

Weak Axiom

A concept in consumer theory that assumes if a consumer prefers a bundle A over bundle B when prices are unchanged, they will not prefer B over A if the price of A decreases and B remains the same or increases.

Revealed Preference

An economic theory that assumes consumers' preferences can be revealed by their purchasing habits.