Multiple Choice
In Massachusetts, the price elasticity of license plates is 3.5 and their price is $50. Massachusetts is:
A) maximizing revenue since elasticity is greater than 1 and revenue will increase after a price decrease when demand is elastic.
B) not maximizing revenue since elasticity is greater than 1 and revenue will increase after a price decrease when demand is elastic.
C) maximizing revenue since elasticity is greater than 1 and revenue will decrease after a price decrease when demand is elastic.
D) not maximizing revenue since elasticity is greater than 1 and revenue will decrease after a price decrease when demand is elastic.
Correct Answer:
Verified
Correct Answer:
Verified
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