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Question
Use the following scenario to answer the following questions: Dairy Wishes, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore.
A local merchant raises the price of his good and finds that his total revenues increase. The demand for this good is
a. inelastic. .
b. elastic.
c. relatively price sensitive.
d. perfectly elastic
e. unitary elastic.
Answer
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Related questions
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Price gouging laws will usually result in ________ the product in the distressed market.
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The economic entity most likely to engage in price gouging is
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What will an individual do differently as a buyer in the black market in the long run?
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What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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