Write a small paragraph (2 or 3 sentences) to explain each of your answers
Boeing estimates the elasticity of demand for new commercial jets is –1.25. Explain why the following statements are either true or false (i.e., state whether true or false and explain why.)
1. “The price effect dominates the quantity effect.”
2. “A 4 percent increase in the number of jets sold will require a 5 percent decrease in the price of jets.”
3. “A 5 percent decrease in the price of jets will increase Boeing’s total revenue.”