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Manager 2 cutting the price of a product never

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receive from selling our frozen lasagna is by cutting the price." Manager 2: "Cutting the price of a product never increases the amount of revenue you receive. If we want to increase revenue, we have to increase price." Do you agree with the reasoning of Manager 2? a) I disagree. Cutting the price will increase the revenue only if the demand is inelastic. b) I disagree. Cutting the price will increase the revenue if the demand is price elastic. c) I agree. Cutting the price will never increase the amount of revenue you receive. d) I agree. Cutting the price will not increase the amount of revenue, you have to increase price. Answer: B 5) The cross-price elasticity of demand is a) the percentage change in quantity demanded divided by the percentage change in income. b) the percentage change in quantity supplied divided by the percentage change in price. c) the percentage change in quantity demanded of one good divided by the percentage change in the price of another good. d) the percentage change in quantity demanded of one good divided by the percentage change in the quantity of another good. e) the percentage change in quantity demanded divided by the percentage change in price. Answer: C
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2 6) If the cross-price elasticity of demand is negative, then the products are: 7) Income elasticity of demand is
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