Table 6-5 -Refer to Table 6-5.Katie Graham Owns a Kayak Rental Service

question 76

Multiple Choice

Table 6-5

-Refer to Table 6-5.Katie Graham owns a kayak rental service in Santa Barbara.Table 6.5 shows her estimated demand schedule for kayak rentals per week.She would like to increase her sales revenue by changing the price she charges for rentals.At present she charges $75.Based on the information in the table, Katie

• A)is not able to increase her revenue by changing her price because the demand for kayak rentals is unit elastic.
• B)should lower her price to $60 to increase her revenue because the demand for kayak rentals is price elastic.
• C)should raise her price to $80 to increase her revenue because the demand for kayak rentals is price inelastic.
• D)should raise her price to earn the most revenue.

---

Definitions:

529 Plan

A tax-advantaged savings plan designed to encourage saving for future education costs, including tuition, fees, and room and board.

Annual Return

The percentage change in an investment's value over a one-year period, taking into account both capital gains and dividend or interest earnings.

Roth IRA

A type of individual retirement account where contributions are made with after-tax dollars, but withdrawals during retirement are tax-free.

Traditional IRA

A Traditional Individual Retirement Account (IRA) is a type of retirement savings account that allows an individual to make pre-tax contributions, with the investments growing tax-deferred until withdrawals begin at retirement age.