Asked by Austin Collins on May 16, 2024
Verified
Total revenue will decrease if the price goes _____ and demand is _____.
A) up;perfectly price-inelastic
B) up;price-inelastic
C) down;price-elastic
D) up;price-elastic
Total Revenue
The total amount of money a company receives from selling its goods or services, calculated as the quantity sold multiplied by the sale price.
Perfectly Price-inelastic
A situation where the quantity demanded or supplied of a good does not change in response to a price change.
- Infer the correlation between the price elasticity of demand and overall revenue.
- Comprehend how variations in prices affect overall income in relation to demand elasticity.
Verified Answer
SS
SadGal ShanyaMay 17, 2024
Final Answer :
D
Explanation :
When the price goes up and demand is price-elastic, total revenue will decrease because the increase in price will cause a greater decrease in quantity demanded, resulting in less revenue overall.
Learning Objectives
- Infer the correlation between the price elasticity of demand and overall revenue.
- Comprehend how variations in prices affect overall income in relation to demand elasticity.