Suppose the Board of Directors of the local symphony proposes that the admission price for an fundraising concert be raised as a means of increasing funds to support music programs.  Its members are implicitly assuming that the price elasticity of demand for a ticket is: Group of answer choices less than one in absolute value (i.e., inelastic). greater than one in absolute value (i.e., elastic). equal to one in absolute value (i.e., unit elastic) This says nothing about price elasticity.

Suppose a firm sells a product that has many close substitutes and is seen as a luxury item. The demand for the good is likely to be _______and the price elasticity of demand (in absolute value) would be ________ a)inelastic, greater than one b)elastic, greater than one c)elastic, less than one d)inelastic, less than one

According to studies undertaken by the U.S. department of agriculture, the price elasticity of demand for cigarettes is about +0.5. Suppose a major brokerage firm advised its clients to buy cigarette stock under the assumption that, if consumer income rise by 50 percent as expected over the next decade, cigarette sales would double. Based on the fundamental economic principles on income elasticity of demand, a reasonable reaction to this investment advice would be?

QUESTION 2 Replicas of popular mid-century furniture and homeware can be highly sought after by interior designers. Suppose a company sold 1000 replica Eames chairs for a price of $600 each. However, when they set the price at $750, they only sold 750. Which of the following statements are true: The point price elasticity of demand for replica Eames chairs at a price of $600 is unit elastic. At a price of $600 per chair, a 1% increase in the price of replica Eames chairs would lead to a 1% decrease in the quantity of chairs sold. The point price elasticity of demand for replica Eames chairs at a price of $600 is 0.0239 (to four decimal places). The point price elasticity of demand for replica Eames chairs at a price of $600 is 0.02 (to two decimal places).