Asked by Krystal Phengsomphone on Jul 07, 2024
Verified
Price and total revenue move in inverse directions when demand is
A) price elastic.
B) price inelastic.
C) unit price elastic.
D) perfectly price inelastic.
Price Elastic
A measure of how much the quantity demanded of a good responds to a change in the price of that good. It indicates the sensitivity of consumers to price changes.
Total Revenue
The total income received by a firm from the sale of its products or services before any expenses are deducted.
- Delve into the relationship between price modifications and the entirety of revenue.
Verified Answer
TM
Tayte MotsingerJul 08, 2024
Final Answer :
A
Explanation :
When demand is price elastic, a decrease in price leads to a larger percentage increase in quantity demanded, which increases total revenue, and vice versa. This indicates an inverse relationship between price and total revenue.
Learning Objectives
- Delve into the relationship between price modifications and the entirety of revenue.