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Calculating inflation using a simple price index
Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply.
A. A new mobile device for personal computing became available for purchase.
B. Professors required each student to buy 10 notebooks, regardless of the price.
C. Energy drinks became increasingly popular on college campuses between 2010 and 2012 due to significant improvements in flavor.
D. As the price of calculators rose, fewer students decided to buy them, opting instead to use the free calculators in their cell phones or on their computers.
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show the new quantity demanded at that price as we did in class. Also, show that the new total revenue will be greater than then old total revenue.
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