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Unformatted text preview: a. 10 b. 5 c. 2 d. 1 e. 0.5 3. When the demand curve for a good is perfectly inelastic, raising the price of the good by 25% will raise the revenue of the firm by: a. 25% b. 50% c. 75% d. 100% e. 125% 4. If the cross-elasticity of demand of the two goods is negative, we can conclude that the two goods are: a. substitutes; b. complements; c. normal goods; d. inferior goods; e. luxury goods Answers: 1. b 2. e 3. a 4. b...
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