41.
A local water company decides to increase the price of water by 5 percent. It finds that its revenues increase by 3 percent as a result of this price change. Demand for water in this market is ____________.
- perfectly elastic
- perfectly inelastic
- elastic
- inelastic
- unit elastic
42.
When a consumer’s income increases by 5 percent, demand for potatoes decreases by 3 percent. In this case, potatoes are a(n) ____________.
- normal good
- perfect substitute
- inferior good
- perfect complement
- inelastic good
43.
A firm knows that the elasticity of demand for its product is 5. By how much does it need to reduce prices in order to increase sales by 10 percent?
- 1/5 percent
- 1 percent
- 2 percent
- 5 percent
- 10 percent