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# 1. Suppose there is an in

1. Suppose there is an increase in the supply of a product. Rank the following own price elasticity of demand classifications according to which has BOTH the largest effect on price and the smallest effect on quantity: perfectly (infinitely) elastic, elastic, inelastic, unit elastic, or perfectly (infinitely) inelastic. Diagrams may be useful.2. If the own price elasticity of demand for beer is approximately unity, what would be the direction of the change (increase, decrease, no change) in total revenue, total cost and profits of an increase in price.The change in the direction of total revenue is:_________________________________The change in the direction of total cost is:_________________________________The change in the direction of profits is:_________________________________3.cigarette manufacturers colluded to raise prices by 20%. Predict the direction of the change (increase, decrease, no change) in total revenue, total costs and profits of all companies combined if price were to increase.The change in the direction of total revenue is:_________________________________The change in the direction of total cost is:_________________________________The change in the direction of profits is:_________________________________4. Christmas toys at Thanksgiving time, Christmas toys on Christmas EveThe product that is more elastic is ________________________The own price elasticity of demand determinant(s) involved is/are_________________________________________________________________