What Happens to Total Revenue When Demand Is Unit Elastic

question 115

Multiple Choice

What happens to total revenue when demand is unit elastic and the price changes?

• A) Revenues increase when the price increases.
• B) Revenues remain unchanged.
• C) Revenues decrease when the price increases.
• D) The change in revenues cannot be estimated.

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Definitions:

Utility

The total satisfaction or benefit received from consuming a good or service.

Place Utility

The value added to products by having them available at the location where they are needed or desired by consumers.

Boarding Pass

A document provided by an airline during check-in, granting a passenger permission to enter the secure area of an airport and board a specific flight.

Service Station

A facility dedicated to the sale of gasoline and often providing maintenance and repair services for vehicles.