21. An industry is operating at a point on the demand curve where the quantity of output is 8,000 units. We are told that the elasticity of demand, expressed as a positive number, is 1/4. The industry hires us as a consultant, and asks us to figure out the impact on the revenue collected by the industry when the price is raised by $1. When we get home, we realize that we have not been told the current price in this industry (but we do know that it is a lot more than $1, so that the proposed price increase is a small fraction of the current price). Can we still work out the effect on revenue, and if so what is it? A) yes, revenue will rise by about $2000 C) yes, revenue will rise by about $6000 E) yes, revenue will rise by about $10000 G) yes, revenue will fall by about $4000 I) yes, revenue will fall by about $8000 B) yes, revenue will rise by about $4000 D) yes, revenue will rise by about $8000 F) yes, revenue will rise by about $2000 H) yes, revenue will fall by about $6000 J) yes, revenue will fall by about $10000 has a total cost

21. An industry is operating at a point on the demand curve where the quantity of output is 8,000 units. We are told that the elasticity of demand, expressed as a positive number, is 1/4. The industry hires us as a consultant, and asks us to figure out the impact on the revenue collected by the industry when the price is raised by $1. When we get home, we realize that we have not been told the current price in this industry (but we do know that it is a lot more than $1, so that the proposed price increase is a small fraction of the current price). Can we still work out the effect on revenue, and if so what is it? A) yes, revenue will rise by about $2000 C) yes, revenue will rise by about $6000 E) yes, revenue will rise by about $10000 G) yes, revenue will fall by about $4000 I) yes, revenue will fall by about $8000 B) yes, revenue will rise by about $4000 D) yes, revenue will rise by about $8000 F) yes, revenue will rise by about $2000 H) yes, revenue will fall by about $6000 J) yes, revenue will fall by about $10000 has a total cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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