2.Suppose that you own a company, and can set your own prices. Your aim is to maximize sales. Which of the following is the best strategy?

(A) Increase prices as long as demand is elastic.

(B) Increase prices as long as demand is inelastic.

(C) Decrease prices when supply is elastic.

(D) Decrease prices when supply is unit elastic.

3.Which of the following goods has the lowest elasticity of supply?

(A) Picasso paintings.

(B) Bicycles.

(C) Cuban cigars.

(D) COVID-19 test kits.

An economics professor polls his class, and asks how many of them would drop out or transfer if Brock University raises its tuition by 10%. Based on the poll, 10% of his students say they would leave Brock.

Based on this poll, what is the elasticity of demand for a Brock University education?

(A) Inelastic.

(B) Elastic.

(C) Unit elastic.

(D) Impossible to compute based on limited information.

If the elasticity of demand for economics textbooks is -0.1, and the price of textbooks increases by 20%, then how much will quantity demanded change?

(A) Quantity demanded increases by 2%.

(B) Quantity demanded decreases by 20%

(C) Quantity demanded decreases by 2%.

(D) Quantity demanded remains the same