The Price of Good X Increases from $55 to $60

question 185

Multiple Choice

The price of good X increases from $55 to $60, and quantity demanded decreases from 500 to 400. The price of good Y increases from $55 to $60, and quantity demanded decreases from 500 to 475. Given this information, the:

• A) consumers who buy good X are less sensitive to price changes than consumers who buy good Y.
• B) demand curve for good X is less elastic than the demand curve for good Y.
• C) demand curve for good X is more elastic than the demand curve for good Y.
• D) demand curves for good X and good Y violate the law of demand.

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Definitions:

Production Workers

Employees involved directly in the manufacturing process, contributing to the creation of goods.

Implicit Costs

Refer to the opportunity costs of using resources owned by the business for its operations, without any explicit financial payment.

Economic Profit

The difference between total revenues and total costs, including both explicit and implicit costs, measuring the financial success of a business beyond normal profit margins.

Explicit Costs

Refers to direct monetary expenses businesses incur in their operations, such as wages, rent, and materials.