The Demand for a Good Is Elastic If

question 60

Multiple Choice

The demand for a good is elastic if

• A)an increase in price leads to a decrease in total revenue
• B)an increase in price leads to an increase in total revenue
• C)an increase in price causes no change in total revenue
• D)total revenue is maximum
• E)total revenue is minimum

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Definitions:

Transfer Payments

Payments made by governments to individuals without any expectation of a good or service being provided in return, such as social security benefits and unemployment benefits.

Excise Tax

A tax levied on specific goods, services, or transactions, often focused on items such as alcohol, tobacco, and gasoline.

Demand Curves

A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to buy at different prices.

Supply Curves

Graphical representations showing the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.