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The demand for wooden pencils is very responsive to a change in price. That is, the demand for these pencils is highly elastic. Suppose that workers in this industry are successful in negotiating a higher wage from management. As a result:
A. The price and quantity of pencils purchased will fall, and gross revenues will rise.
B. Price and quantity purchased will rise, and gross revenues will fall.
C. Price will fall, quantity purchased will rise, and gross revenues will rise.
D. Price will rise, quantity purchased will fall, and gross revenues will fall.
Answers: 3
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