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If the demand for donuts is elastic, then a decrease in the price of donuts will:

a. increase total revenue of donut sellers
b. decrease total revenue of donut sellers
c. not change total revenue for donut sellers
d. there isn't enough information

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Margaux Elysse C. Siason
Margaux Elysse C. SiasonLv6
28 Aug 2020
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Related questions

Doug wants to go into the donut business. For $500 per month, he can rent a bakery complete with all the equipment he needs to make a dozen different kinds of donuts (K=1). He must pay unionized donut bakers a monthly salary of $400 each. He projects his production function to be Q=5KL (where Q is tons of donuts).

a) What is Doug's monthly total cost function, variable cost function, and marginal cost? (Write the TC as a function of FC and VC and then, rewrite it in terms of Q to get started).

b) How many bakers will Doug hire to make 25 tons of donuts?

c) What will happen to Doug's total cost if his production function turns out to be Q=2KL? (Do a and b again with new Q)

Ā 

Use the following information to answer the next 4 questions. Coffee and tea are substitutes. Coffee and donuts are complements, but tea and donuts are not directly related. A severe drought in several coffee-producing countries has severely reduced the number of coffee plants in the world. 25. What effect will the drought have on the market for coffee? (a) Decrease demand. (b) Decrease supply. (c) Increase supply. (d) Increase demand.

If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:

a) decrease will increase total revenue in the short run but decrease total revenue in the long run.

b) decrease will decrease total revenue in the short run and decrease total revenue in the long run.

c) increase will decrease total revenue in the short run but increase total revenue in the long run.

d) increase will increase total revenue in the short run but decrease total revenue in the long run.

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