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| The demand for saffron is highly elastic. The demand for cigarettes is highly inelastic. The demand for peanut butter is unit-elastic. a. If saffron producers reduce the price of saffron, what will happen to total revenue as a result? Will marginal revenue be positive, zero, or negative? b. If cigarette makers reduce the price of cigarettes, what will happen to total revenue as a result? Will marginal revenue be positive, zero, or negative? c. If peanut butter producers reduce the price of peanut butter, what will happen to total revenue as a result? Will marginal revenue be positive, zero, or negative? |
