1.7 Which one of the following statements is correct? If the price elasticity of
ID: 1142140 • Letter: 1
Question
1.7 Which one of the following statements is correct? If the price elasticity of the demand for ice cream is greater than one, then the suppliers of ice cream can increase their total revenue by raising the price of ice cream. The price elasticity of demand stays the same at each point along a linear demand curve. If a 10 per cent increase in university fees results in a 5 per cent reduction in the quantity of university education demanded, then the demand for university education is price elastic. If the price elasticity of the demand for bread is less than one, a decrease in the price of bread will lower the total revenue of the suppliers of bread a) b) c) d)Explanation / Answer
option d is correct because when PED ( price elasticity of demand )< 1 so it leads to increses the price of bread and also total revenue of the suppliers of bread and a vice versa ( or leads to decrease in price will also lower the total revenue )
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