Asked by Justin Maynes on Jul 21, 2024
Verified
The demand for heroin addicts among users is known to be almost perfectly inelastic.This means that if the price of heroin increases
A) total revenue for drug dealers will rise.
B) total revenue for drug dealers will stay the same.
C) total revenue for drug dealers will fall.
Perfectly Inelastic
A market situation where the quantity demanded or supplied does not change despite changes in price, represented by a vertical demand or supply curve.
Heroin Addicts
Individuals who suffer from the addiction to heroin, a highly addictive opioid drug.
Total Revenue
The aggregate revenue a business accumulates from its sales of products or delivery of services in a given period.
- Grasp the foundational concept of demand elasticity and the influences exerted by different variables.
- Gain insight into the relationship between price adjustments and total revenue with a focus on elasticity.
Verified Answer
CS
Catherine SidesJul 26, 2024
Final Answer :
A
Explanation :
When the demand for a product is inelastic, a change in price will not have a significant impact on the quantity demanded. In the case of heroin addicts, they are willing to pay almost any price for the drug, as they are addicted and cannot easily quit. Thus, if the price of heroin increases, the demand will remain relatively constant, and drug dealers will be able to increase their prices without losing customers. This will lead to a rise in total revenue for drug dealers.
Learning Objectives
- Grasp the foundational concept of demand elasticity and the influences exerted by different variables.
- Gain insight into the relationship between price adjustments and total revenue with a focus on elasticity.