Ask Question
19 September, 21:07

Total revenue decreases as the price of a good increases, if the demand for the good is rev: 05_14_2018

Multiple Choice

- unitary elastic.

- inelastic.

- elastic.

- perfectly elastic.

+4
Answers (2)
  1. 19 September, 21:14
    0
    What unit elasticity means, therefor, is that any increase in the price causes a decrease in demand that keeps revenue the same. In a normal market a price which maximizes revenue must have this property, by definition, because if a higher price produces more revenue, we obviously have not maximized it
  2. 19 September, 21:19
    0
    Answer: Option (C) is correct.

    Explanation:

    Elastic demand means that percentage change in price lead to greater change in the quantity demanded.

    So, if the price of a good decreases then the consumers demand for a good increases and hence increase in the total revenue. On the other hand, if the price of a good increases then as a result demand for that commodity decreases and hence decrease in the total revenue.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Total revenue decreases as the price of a good increases, if the demand for the good is rev: 05_14_2018 Multiple Choice - unitary elastic. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers