Asked by Clayton Scheutzow on Jun 30, 2024
Verified
At a price of $20, a store can sell 24 picture frames a day. At a price of $18 the store can sell 33 picture frames a day. Since total revenue ________ by the price decrease, demand must be ________.
A) is increased; elastic
B) is increased; inelastic
C) is increased; unit elastic
D) is decreased; elastic
Total Revenue
The total receipts from sales of goods and services to customers; it is the unit price times the quantity of goods or services sold.
Quantity Demanded
The total amount of a good or service that consumers are willing and able to purchase at a given price level.
- Assess the connection between changes in pricing and the aggregate revenue generated.
- Pinpoint the area on the demand curve that denotes elasticity types (elastic, inelastic, unit elastic).
Verified Answer
CM
Connor McGeeJul 05, 2024
Final Answer :
A
Explanation :
The total revenue at $20 is $480 (24 frames * $20), and at $18 it is $594 (33 frames * $18), showing an increase in revenue with a price decrease, indicating elastic demand.
Learning Objectives
- Assess the connection between changes in pricing and the aggregate revenue generated.
- Pinpoint the area on the demand curve that denotes elasticity types (elastic, inelastic, unit elastic).