Explain why the following statement is true: A firm with a demand curve that is inelastic at

Question:

Explain why the following statement is true: "A firm with a demand curve that is inelastic at its current output level can always increase its profits by raising its price and selling less."

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Economics Principles and Policy

ISBN: 978-0538453653

12th edition

Authors: William J. Baumol, Alan S. Blinder

See More Books

Question Posted: Apr 12, 2016 07:12 AM

See More Questions

Explain whether the following statement is true or false: Only weak companies issue debentures.
Explain why the following statement is not necessarily true: ''If the IRS disagrees, I'll take my case all the way to the Supreme Court.''
Explain why the following statement is true: Other things being equal, firms with relatively stable sales are able to carry relatively high debt/assets ratios.
What are the delta and gamma of an option?
Refer to the transactions of Circuit Country in P63B. In P63B, at the beginning of June, Circuit Country has a balance in inventory of $3,000. The following transactions occur during the month of...
Charged particles 1,2 , and $3\left(q_{1}=10.0 \mu \mathrm{C}, q_{2}=-5.00 \mu \mathrm{C} ight.$, and $\left.q_{3}=-3.00 \mu \mathrm{C} ight)$ are arranged in an equilateral triangle in an \(x...
Consider the multiple linear regression model for the rental price data in Problem 3.42. Problem 3.42 Table B.24 contains data on median family home rental price and other data for 51 US cities. Fit...
Recreational Supplies Co. has net sales of $11,655,000, an ROE of 17.64 percent, and a total asset turnover of 2.89 times. If the firm has a debt-to-equity ratio of 1.43, what is the companys net...
Consider a Specific-Factors model where two countries, Domestic and Foreign, produce two goods, A and B, using labor L and capital K. Take the following information as given: In Domestic, the...
Zurgot Inc. has just organized a new division to manufacture and sell specially designed computer tables, using select hardwoods. The divisions monthly costs are shown in the schedule below:...
A rise in the price of a product whose demand is elastic will reduce the total revenue of the firm. Explain.
A firm's total fixed cost is $360,000. Construct a table of its total and average fixed costs for output levels varying from zero to six units. Draw the corresponding TFC and AFC curves.
Consider the following set of candidate 3-itemsets: {1, 2, 3}, {1, 2, 6}, {1, 3, 4}, {2, 3, 4}, {2, 4, 5}, {3, 4, 6}, {4, 5, 6} (a) Construct a hash tree for the above candidate 3-itemsets. Assume...
Why do professional athletes get paid to huge extents? Discuss. please Include economic concepts/terminology (marginal revenue product?)
When it comes to managing costs across the supply chain what would be the most effective way to manage cost?
The next CPI report for May 2023 inflation figures will be released by the BLS (Bureau of Labor Statistics) on June 13 at 8:30 am Eastern time. Using this CPI report of the BLS a) Find Consumer Price...
It is essentially impossible for any governmental unit to operate alone; therefore, it is essential for public administrators to understand the nature of intergovernmental administration and the...
Can you please help me? Explain the difference between: Short-runandlong-runaggregate demand Short-runandlong-runaggregate supply Reviewthefollowingwebpageson WhiteNova-ThinkEconomics...
According to data from the National Traffic Safety Institute, the stopping distance y in feet of a car traveling x mph can be described by the equation y = 0.056057x 2 + 1.06657x. (a) Find the...
Perform the operation by first converting the numerator and denominator to scientific notation. Write the answer in scientific notation. 7,200,00/0.000009
For over 25 years now, imports have consistently exceeded exports in the U.S. economy. Many people consider this imbalance to be a major problem. Does this chapter give you any hints about why?
Explain the basic logic behind the multiplier in words. Why does it require b, the marginal propensity to consume, to be between 0 and 1?
What would happen to the multiplier analysis if b = 0? If b= 1?
This project requires an investment in fixed assets, at time 0, of 44,000,000. Assets will be depreciated straight line in 5 years. This project has a 4 year life. The revenues for each of the 4...
Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year - end, the Work in Process Inventory account shows the following. Work in Process Inventory Date Explanation...
T-bill with a $10,000 par has 174 days until maturity. The T-bill has a bank discount bid quote of 2.208% and ask quote of 2.198%. What is the return on the investment in this T-bill if the trader...

Explain why the following statement is true: A firm with a demand curve that is inelastic at

Question:

Step by Step Answer:

If the demand curve is inelastic the percentage decline in quantity wi...View the full answer

Economics Principles and Policy

Students also viewed these Economics questions