- Test Final In The Figure At Right Along Which Range Would The Demand For This Good Be Most Elastic Oa Between Point 1 (26.1 KiB) Viewed 11 times
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bu bu In the figure at right, if the budget line is originally line DE and the price of coffee decreases, the consumer will A. drink more coffee and decrease bagel consumption slightly. B. drink more coffee and increase bagel consumption slightly. C. leave consumption of both coffee and bagels unchanged. D. drink less coffee and increase bagel consumption slightly. Quantity of Bagels E Quantity of Coffee A Submit tes 12 Next
Test: FINAL < Question 46 of 90 This test: 90 point(s) possible This question: 1 point(s) possible A. Basic options cost automobile companies substantially less than luxury options. B. Basic options are standard and therefore customers are unwilling to pay a premium for them. OC. Luxury options have a higher price elasticity of demand than basic options. OD. Basic options are in greater supply than the luxury options. ⒸE. Luxury options have a lower price elasticity of demand than basic options. Resume later Submit test When pricing automobiles, American car companies typically charge a much higher percentage markup over cost for "luxury option items (such as leather trim, etc.) than for the car itself or for more "basic" options such as power steering and automatic transmission. Explain why.