Economics Question?

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If the demand for Frank's Cookies is inelastic, a decrease in the price of his cookies would be predicted to cause

(a) an increase in quantity supplied.
(b) a decrease in quantity demanded.
(c) a decrease in total revenue.
(d) an increase in total expenditure.

2007-09-26 10:34:34 · 2 answers · asked by Anonymous in Education & Reference ➔ Homework Help

2 answers

C

Because Frank is making all the cookies he can and can't supply more. If his demand is inelastic it means it is constant so if they decrease the price of his cookies he would have a decrease in total revenue because he cannot produce cookies faster.

2007-09-26 10:39:21 · answer #1 · answered by Frosty 7 · 0⤊ 0⤋