Asked by Katherine Lupercio on Jun 18, 2024
Verified
If price and total revenue vary in opposite directions, demand is
A) perfectly inelastic.
B) perfectly elastic.
C) relatively inelastic.
D) relatively elastic.
Inelastic
Describes a situation where the demand or supply of a good or service is relatively unresponsive to changes in price.
Total Revenue
The total amount of money generated by selling goods or services before any expenses are subtracted.
Opposite Directions
A term potentially used to describe actions or movements that are completely contrary to each other in orientation or aim.
- Differentiate the characteristics of elastic, inelastic, unit-elastic, perfectly inelastic, and perfectly elastic demand.
- Explore the association between changes in price and the impact on total revenue.
Verified Answer
RA
Rebeca AlvarezJun 24, 2024
Final Answer :
D
Explanation :
When price and total revenue move in opposite directions, it indicates that the demand is relatively elastic. This means that a small change in price leads to a larger percentage change in the quantity demanded.
Learning Objectives
- Differentiate the characteristics of elastic, inelastic, unit-elastic, perfectly inelastic, and perfectly elastic demand.
- Explore the association between changes in price and the impact on total revenue.