If the Price of Good X Falls and the Demand

question 145

Multiple Choice

If the price of good X falls and the demand for good X is unit elastic, then the percentage rise in quantity demanded is __________ the percentage fall in price, and total revenue __________.

• A)greater than; rises
• B)less than; falls
• C)equal to; remains constant
• D)greater than; falls
• E)less than; rises

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Definitions:

Price Increase

The rise in the cost of goods or services in the market.

Labor Needed

The quantity and type of workforce required to produce a certain level of output or to perform specific tasks.

Complementary Input

Goods or services that enhance the value or efficiency of another product or service when used together.

Demand Curve

A graph that shows the relationship between the price of a product and the quantity of the product demanded.