Question : 31) Which of the following correctly comments the following statement? : 1245218

31) Which of the following correctly comments on the following statement? “The only way to increase the revenue from selling a product is to increase the product’s price.”

A) It is not true. Revenue will increase as the price of the product increases only if demand is elastic.

B) This statement is not true. Revenue will increase as the price of the product increases only if demand is inelastic.

C) The statement is true.

D) This statement is not true. Revenue will decrease as the price of the product increases because quantity demanded will fall.

32) If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, demand for using the toll road must be

A) inelastic.

B) elastic.

C) unit elastic.

D) perfectly elastic.

33) If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, then an increase in tolls will result in

A) a decrease in total revenue.

B) a decrease in non-toll road usage.

C) an increase in total revenue.

D) an increase in toll road usage.

Article Summary

Based on resale prices for tickets for the 2013 Super Bowl in New Orleans, face-value prices for the most expensive tickets to the 2014 game are expected to more than double, with significant price increases for lesser-valued tickets as well. Evidence indicates that sports teams are more interested in maximizing attendance instead of ticket revenue, since greater attendance means more spending on items such as parking and concessions. Higher ticket prices in secondary markets seem to verify that teams are charging less than they

34) Refer to could be if their goal was to maximize ticket revenue.

Source: Patrick Rishe, “Super Bowl XLVIII Pricing: A Lesson In Demand Elasticity,” Forbes, September 19, 2013.

the Article Summary. The idea that sports teams could charge more for tickets and still increase revenue indicates that tickets are being priced in the ________ portion of their demand curve.

A) elastic

B) inelastic

C) unit elastic

D) perfectly elastic

35) Refer to the Article Summary. How would sports teams know if they were operating on the elastic portion of the demand curve for tickets?

A) If they increased ticket prices and the total revenue from ticket sales increased.

B) If they increased ticket prices and the total revenue from ticket sales did not change.

C) If they increased ticket prices and the total revenue from ticket sales decreased.

D) If they decreased ticket prices and the total revenue from ticket sales did not change.

36) If a firm’s goal is to maximize revenue, it will price its product to correspond to the unit-elastic segment of its demand curve.

37) When Audrina raised the price of her home made cookies, her total revenue increased. This suggests that the demand for Audrina’s cookies is elastic.

38) If the price elasticity of demand is unit-elastic, a 10 percent increase in price will result in a 10 percent increase in revenue.

39) If demand for a product is perfectly inelastic a change in price will not change total revenue.

40) Suppose the absolute value of the price elasticity of demand for basketball game tickets on your campus is greater than 1. Increasing ticket prices will increase the total revenue from ticket sales.