Asked by andisha nesbitt on Jun 30, 2024
Verified
Total revenue increases if price ________ and demand is ________.
A) falls; inelastic
B) falls; unit elastic
C) rises; elastic
D) rises; inelastic
Total Revenue
The total income generated by a firm from selling its goods or services.
Price Falls
A situation where the market price of a good or service decreases.
- Understand the effect of demand elasticity on the overall revenue outcome.
- Define the unique attributes that separate elastic, inelastic, and unit elastic demand.
Verified Answer
CS
CAITLYN STANKOVICJul 05, 2024
Final Answer :
D
Explanation :
Total revenue increases when price rises and demand is inelastic because consumers are relatively unresponsive to price changes, leading to an increase in revenue despite the higher price.
Learning Objectives
- Understand the effect of demand elasticity on the overall revenue outcome.
- Define the unique attributes that separate elastic, inelastic, and unit elastic demand.
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