The Acme Manufacturing Company asks a consultant if it should lower its price. The consultant tells it that it should not because consumers would not respond much to a lower price. In this example, the:

consultant's statement is an example of a normative statement.
consultant is suggesting that the demand for the product is inelastic.
consultant believes that the production of the product entails external diseconomies.
consultant is stating that the company has limited liability.
consultant does not believe in the law of demand.

If demand elasticity is greater than one, producing and selling one more unit of output will:

increase costs.
decrease costs.
increase revenue.
decrease revenue.

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