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If the Price Elasticity of Demand (PED) = 1 then… Price should be decreased to maximize revenue. Price...

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Economics

  1. If the Price Elasticity of Demand (PED) = 1then…
  1. Price should be decreased to maximize revenue.
  2. Price should be increased to maximize revenue.
  3. Revenue is at its maximum.
  4. Profit is at its maximum.

  1. If the demand for good X shifts to the right as theprice of good Y rises, then goods X and Y are:
  1. Inferior goods.
  2. Complementary goods.
  3. Normal goods.
  4. Substitute goods.
  1. Which of the following is not a determinant ofPrice Elasticity of Demand (PED)?
    1. The availability of close substitutes.
    2. Time horizon: the passage of time.
    3. The proportion of income spent on the good.
    4. The preferences of sellers.

  1. The concepts of Utility and Marginal Utility are onlyapplicable for:
  1. Markets for two goods.
  2. All the consumers of one good or service
  3. An individual consumer or household.
  4. None of the above.
  1. An explicit cost is …
  1. A variable cost that increases with quantity.
  2. A fixed cost that does not increase with quantity.
  3. A cost that involves spending money.
  4. The same as an opportunity cost.

Answer & Explanation Solved by verified expert
3.7 Ratings (529 Votes)
1 PED 1 implies that Revenue is maximum PED1 occurs at themiddle of demand curve where MR0 and beyond that level MR becomesnegative This eats into the Total Revenue And at a point beforethat PED1 that is customers react positively to pricereduction and sales increase the revenue Thus TR maximises wherePED1Hence c is the correct answer2 If the demand for good X shifts to the right when price of Yincreases then the goods are Substitute Goods This means thatwhen X has    See Answer
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