If Supply Decreases and Total Revenue in an Industry Increases

question 30

Multiple Choice

If supply decreases and total revenue in an industry increases,

• A)demand elasticity must be equal to 1.
• B)demand must be horizontal.
• C)demand elasticity must be greater than 1.
• D)we have a perfectly implausible situation.
• E)demand elasticity must be less than 1.

---

Definitions:

Dissolution

The process of legally dissolving a company or partnership, ending its existence by winding up affairs, liquidating assets, and distributing the remaining assets or debts to shareholders or partners.

Original Capital

The initial amount of money invested in a business by its owners or shareholders.

Share of Income

The portion of earnings allocated to a shareholder, typically in the form of dividends.

Salaries

Payments made to employees for their services over a specified period, typically expressed on an annual basis.