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In: Economics

True False question #7A concept of "value-added" to goods might be something like washed, diced, and...

True False question

#7A concept of "value-added" to goods might be something like washed, diced, and packaged lettuce ready for the salad bowl?
T/F


#8A "value-subtractor" might be something like a rumor of contaminated meat from a fast food outlet?
T/F

#9 The lack of substitutes and an urgency of need would categorize that item as inelastic pricing? (NYC subways)

#10 Elastic demand means that total revenues increase when prices are decreased?

#11 With inelastic pricing, a BMW would actually decrease profits by lowering the price?

#12 The Robinson Patman Act was instituted to reduce unfair Trade Practices?

13 The price charged for a product multipled by the number of units sold is called revenue?

Solutions

Expert Solution

Question:- concept of "value-added" to goods might be something like washed, diced, and packaged lettuce ready for the salad bowl?

Answer:- True

Reason:- value addition can be anything which adds the value of the product for the customer in any means.

Question:- The lack of substitutes and an urgency of need would categorize that item as inelastic pricing?

Answer:- True

Reason:- Inelasticity increases when there is no substitute of the product and the requirement of the product is on the urgent basis as a customer will be ready to any price due to lack of alternatives and promptness of requirement of the product.

Question:- Elastic demand means that total revenues increase when prices are decreased.

Answer:- True

Reason:- When the price is reduced, the demand for an elastic product will increase and thus the total revenue will increase.

Question:- With inelastic pricing, a BMW would actually decrease profits by lowering the price

Answer:- True

Reason:- When prices of an inelastic product are reduced, the company is losing total revenue and in turn has to face the loss of profit.

Question:- The Robinson Patman Act was instituted to reduce unfair Trade Practices?

Answer:- False

Reason:- This act was passed to prevent price discrimination.

Question:- The price charged for a product multiplied by the number of units sold is called revenue

Answer:- True

Reason:- Total revenue = Price per unit * total sales

Rahul Sunny answered 2 years ago
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