Given a demand curve, explain how total revenue may be calculated.
What will be an ideal response?
A demand curve consists of the prices and corresponding quantities demanded at those prices. Total revenue is price times quantity demanded. Therefore, total revenue is the area of a rectangle formed under the demand curve by the choice of any price-quantity combination.
You might also like to view...
In the above figure, a sales tax of $1 per unit imposed on sellers ________ the price buyers pay and ________ the price that suppliers keep for themselves
A) affects; does not affect B) does not affect; affects C) does not affect; does not affect D) affects; affects
If the marginal propensity to save (MPS) is 0.10, the value of the spending multiplier is:
a. 1. b. 9. c. 10. d. 90.
Which term means legislative spending that benefits a single political district?
a. Budget trading b. Vote cycling c. Logrolling d. Pork-barrel spending
Market failure exists whenever
A. The government intervenes in the market. B. Income distribution is unequal. C. Government intervention makes the income distribution worse. D. The market generates a suboptimal outcome of income distribution.