16. In the short run, if the Federal Reserve reduces interest rates, firms: (A) buy less capital and the marginal product of capital falls (B) buy less capital and the marginal product of capital rises (C) buy more capital and the marginal product of capital falls (D) buy more capital and the marginal product of capital rises

1. When the local used bookstore prices economics books at $20.00 each, they generally sell 70 per month. If they lower the price to $8.00 each, they sell 90. Hence, the elasticity of demand for these economics books is (A) 3.43, so this store should lower price to raise total revenue. (B) 3.43, so this store should raise price to raise total revenue. (C) 0.29, so this store should lower price to raise total revenue. (D) 0.29, so this store should raise price to raise total revenue.

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