For each of the following scenarios, decide whether you agree or disagree and explain your answer.

a. Suppose that elasticity of demand for hospital services is -0.15 and that the British government is charging non-UK patients 50 percent more. Britain’s Department of Health and Social Care hopes that the changes would help it recoup some of its medical and healthcare costs.

b. In 2017, a record 25.8 million people worldwide took cruise holidays. This number is expected to go up to 27.2 million in 2018. Because the market is competitive, ticket prices have fallen by around 20 percent. If the price elasticity of demand is -1.6, cruise holiday organizers will lose revenues due to the price decline. Assume there has been no shift in the demand curve in the past three years.

c. If the demand for a good has unitary elasticity a decrease in its price will always lead to less revenues for sellers taken as a whole.