You Raised the Price of Your Good by 20% and the Quantity

question 125

Multiple Choice

You raised the price of your good by 20% and the quantity demanded declined by 40%. Demand is:

• A) completely elastic and a decline in price would have yielded a total revenue decrease.
• B) completely inelastic and a decline in price would have yielded a total revenue increase.
• C) unitary elastic and a decline in price would have yielded no change in total revenue.
• D) unitary elastic and a decline in price would have yielded a total revenue decrease.
• E) elastic and a decline in price would have yielded a total revenue increase.

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Definitions:

Land

A natural resource or plot of ground that is owned or controlled and can be used for building, farming, or other purposes.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition.

Fixed Asset

A long-term tangible piece of property or equipment that a company uses in generating income and is not expected to be consumed or converted into cash within a year.

Current Asset

A current asset is any asset likely to be converted into cash within a year during the normal course of a business.