On November 1, 1981 the U.S. Post Office raised the price of mailing a first class letter from 18 to 20 cents, an increase of about 11.1%. If the Post Office faced a section of its demand curve that was elastic, one can predict that revenues would:
increase by more than 11.1%. increase by 11.1%. increase, but by less than 11.1% decrease.
Price elasticity of supply will be greater the:
larger the price elasticity of demand. smaller the price elasticity of demand. shorter the time that sellers have to adjust to the change in price. longer the time that sellers have to adjust to the change in price.
