Asked by DIVYNE PERRIN on Jun 28, 2024
Verified
If price and total revenue are directly related, demand is inelastic.
Inelastic
A situation where the demand for a good or service is relatively unresponsive to changes in price.
Total Revenue
The total amount of money generated by a business from its primary activities of selling goods or services before any expenses are deducted.
Price
The amount of money required to purchase a good or service, often determined by supply and demand dynamics in the market.
- Understand the concept of price elasticity of demand and how it is calculated.
- Comprehend the difference between elastic and inelastic demand.
Verified Answer
MB
Maurice BruceJul 03, 2024
Final Answer :
True
Explanation :
When demand is inelastic, an increase in price does not significantly decrease the quantity demanded, leading to an increase in total revenue, indicating a direct relationship between price and total revenue.
Learning Objectives
- Understand the concept of price elasticity of demand and how it is calculated.
- Comprehend the difference between elastic and inelastic demand.