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29 April, 04:19

The total-revenue test for elasticity:

A. is equally applicable to both demand and supply. B. does not apply to demand because price and quantity areinversely related. C. does not apply to supply because price and quantity aredirectly related. D. applies to the short-run supply curve, but not to thelong-run supply curve.

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  1. 29 April, 04:28
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    Option (C) is correct.

    Explanation:

    The total revenue test is generally applicable to determine the demand for the product is elastic or inelastic.

    This is due to the fact that there is a positive relationship between the price of the product and the quantity demanded for that product. This means that as the price of a product increases then as a result the quantity supplied of that product also increases and as the price of a product decreases then as a result the quantity supplied of that product also decreases.

    There is no need to test the elasticity for supply of the products own company. Also, there is no need to test the capability or ability or willingness of its suppliers.
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