If a Bakery Raises the Price of Its Bread by 11

question 31

Multiple Choice

If a bakery raises the price of its bread by 11 per cent and the quantity demanded decreases by 11 per cent, then the demand for its bread is ________ and the bakery's total revenue ________.

• A) unit elastic; increases
• B) elastic; does not change
• C) unit elastic; decreases
• D) unit elastic; does not change
• E) inelastic; does not change

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Definitions:

Taxpayer's Business

Refers to any enterprise or activity undertaken by an individual with the intention of earning profit.

Depreciation

The method of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up over time.

Tangible Asset

Physical assets such as real estate, equipment, and inventory, distinguished from intangible assets like patents and copyrights.

Trade or Business

Any activity carried on for the production of income from selling goods or performing services.