Can a price increase lead to lower revenue? Suppose a bookstore sells 15 books a day. The price of one book increases from $10 to $12. At this price, the store sells 10 books a day. Discuss the revenue of the store in this case.
How does the number of available substitutes determine the price elasticity of demand?
How is cross-price elasticity of demand used to determine whether two goods are substitutes or complements?
What does a negative income elasticity of demand mean?
Examine the accuracy of the following statement: “Though Apple iPhones and Samsung mobiles are substitute goods, if the price of an iPhone increases, consumers will still buy them because of brand preference.”
If a good is considered to be a luxury good, does it mean that the Law of Demand does not hold?
Examine the accuracy of the following statement: “Given that healthcare services are considered luxury goods based on income elasticity, fewer people can afford to receive assistance to cure their diseases.”