Asked by Madeline Boutot on Jul 12, 2024
Verified
When demand is elastic, an increase in price will result in an increase in total revenue.
Demand Is Elastic
A condition where the quantity demanded of a good or service is significantly changed due to a change in its price. High elasticity indicates a sensitive reaction to price changes.
Total Revenue
The total amount of money received by a company for its goods or services before any expenses are subtracted.
- Recognize how demand elasticity is interrelated with total revenue flow.
- Distinguish between elastic, inelastic, and unit elastic demand.
Verified Answer
NP
nagasaikiran ponnapalliJul 17, 2024
Final Answer :
False
Explanation :
When demand is elastic, an increase in price will lead to a proportionally larger decrease in quantity demanded, thus decreasing total revenue.
Learning Objectives
- Recognize how demand elasticity is interrelated with total revenue flow.
- Distinguish between elastic, inelastic, and unit elastic demand.
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