Multiple Choice
Suppose that when the price of beer is $2 per bottle,firms can sell 4 million bottles.When the price of beer is $3 per bottle,firms can sell 2 million bottles.Which of the following statements is true?
A) The demand for beer is income inelastic,and so an increase in the price of beer will increase the total revenue of beer producers.
B) The demand for beer is income elastic,and so an increase in the price of beer will increase the total revenue of beer producers.
C) The demand for beer is price inelastic,and so an increase in the price of beer will increase the total revenue of beer producers.
D) The demand for beer is price elastic,and so an increase in the price of beer will increase the total revenue of beer producers.
Correct Answer:
Verified
Correct Answer:
Verified
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