When demand is inelastic and price decreases:
A) the effect of the decrease in price on total revenue dominates the effect of the increase in quantity demanded on total revenue; overall total revenue declines.
B) the effect of the increase in quantity demanded on total revenue dominates the effect of the decrease in price on total revenue; overall total revenue increases.
C) the effects of the decrease in price on total revenue and the corresponding increase in quantity demanded on total revenue perfectly offset one another; overall total revenue remains unchanged.
D) quantity demanded and total revenue fall to zero.
A
You might also like to view...
Economic theory is sometimes referred to as marginalism or marginal analysis because
A) it deals with matters not central to most people's personal lives. B) it emphasizes the effects of additional benefits and additional costs. C) it has such a minor effect on political decisions. D) it is only useful when it is added to a large stock of other knowledge. E) it was created by abstracting from experience.
According to the public interest view, economic regulation is always in the special interest of existing producers
Indicate whether the statement is true or false
Which of the following can a nation use to shift the supply or demand for its currency?
A. Trade policies such as tariffs but not fiscal policy. B. Fiscal, monetary, and trade policies. C. Fiscal policy but not monetary policy. D. Monetary policy but not trade policy.
The primary problem with estimating elasticity of demand is that:
A. real-world changes in quantity demanded are the result of changes in price only. B. data on the quantities firms sell are unavailable. C. real-world changes in quantity demanded are the result of changes in many variables other than price alone. D. data on the prices firms charge are unavailable.