When demand is perfectly inelastic, an increase in price will
A) leave total revenue unchanged.
B) increase total revenue.
C) decrease total revenue.
D) either increase total revenue or decrease total revenue, but it is impossible to tell which.
Answer: B
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The pure competitor usually charges higher prices and offers more output than the monopolist or oligopolist
Indicate whether the statement is true or false
Critics of supply-side economics argue that
a. tax cuts do not affect supply, only demand. b. supply-siders exaggerate the effects of tax cuts. c. incentives have no effect on behavior. d. the goals of supply-siders are not supported by most economists.
If the U.S. government imposes an import quota on beef, U.S. net exports will
a. increase, the real exchange rate of the dollar will appreciate, and domestic sales of U.S. beef will increase. b. increase, the real exchange rate of the dollar will depreciate, and domestic sales of U.S. beef will not change c. not change, the real exchange rate of the dollar will appreciate, and domestic sales of U.S. beef will increase. d. not change, the real exchange rate of the dollar will depreciate, and domestic sales of U.S. beef will not change.
When the economy is creating less output than its potential, it means:
A. contractionary policy needs to be enacted. B. there are some resources that are unemployed. C. governments are likely to reduce their spending. D. the economy is in an economic boom.