What Is the Effect on Total Revenue If Demand Is

question 148

Multiple Choice

What is the effect on total revenue if demand is inelastic and price rises?

• A)Total revenue will fall.
• B)Total revenue will rise.
• C)Total revenue may rise or fall depending on the size of the price increase.
• D)Elasticity is not relevant,since total revenue always rises if price increases.

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Definitions:

Depreciated

A reduction in the value of an asset over time, due in particular to wear and tear.

Interest Capitalization

The process of adding interest that has accumulated on a loan to the principal balance of the loan, effectively increasing the total amount owed.

Borrowed

Refers to funds or resources obtained through a loan or credit that must be repaid in the future, often with interest.