Nataraj (2007) finds that a 100100% increase in the price of water for heavy users in santa cruz caused the quantity of water they demanded to fall by an average of 2020%. (before the increase, heavy users initially paid $1.551.55 per unit, but afterwards they paid $3.103.10 per unit.) in percentage terms, how much did their water expenditure (price times quantity)long dash—which is the water company's revenuelong dash—change?

In percentage terms It wil lbe an increase of 60%

Explanation:

We will calculate as follow:

currently the revenue is 1.55

if the price goes up to 3.10 the demand falls by 20%

so we are reducing sales revenue by 20%

3.10 x ( 1 - 20%) = 3.10 x 0.8 = 2.48

Now we can calculate the percent of change in the water expenditure:

2.48/1.55 - 1 = 0.60

In percentage terms It wil lbe an increase of 60%

answer; intensive use of a sales force and is relatively costly;

1. c

2. b

3. a

4. c

5. a

6. b

7. c

8. c

9.b

10. d

just took it 100%