When Price Rises by 3 Percent and Quantity Demanded Changes

question 79

Multiple Choice

When price rises by 3 percent and quantity demanded changes by 6 percent,

• A)total revenue falls 3 percent.
• B)total revenue falls by half.
• C)total revenue doubles.
• D)total revenue does not change.
• E)total revenue increases 18 percent.

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Definitions:

Supply Schedule

A table or graph showing the quantity of a good that producers are willing and able to supply at different prices.

Tax Rate

The rate at which taxes are levied on an individual or a company's income.

Supply Elasticity

A measure of how much the quantity supplied of a good responds to a change in price, indicating the good's price sensitivity on the supply side.

Price Elasticity

The extent to which price adjustments impact the quantity of a good that consumers want to buy.