Question

TRUE or FALSE revenue and elasticity question

Answer 1

Which of the following statements are true (T) and
which are false (F)? No justication required, only the answer counts.
The company Blissful Batteries Inc. sell replacement batteries for Opple's oPad. In the
following, p denotes the unit price of these batteries in dollars and q the quantity sold. We
assume that the function q(p) is differentiable with q0(p) < 0. Blissful Batteries Inc. sell
10000 batteries per week at $5.00 each.


(d) If the replacement battery is a price unit elastic good at a unit price of $5.00, if their
total cost function is of the form C(q) = a+bq with constants a; b > 0 and management
increases the price by a small amount, then their prot decreases.

(e) If the replacement battery is a price inelastic good at every unit price and management
decreases the unit price by 0.2%, then quantity demanded increases by less than 0.2%.

(f) If the replacement battery is a price inelastic good at every unit price and management
decreases the unit price by 1%, then quantity demanded decreases by more than 1%.