Holding All Other Forces Constant,if Decreasing the Price of a Good

question 25

Multiple Choice

Holding all other forces constant,if decreasing the price of a good leads to an increase in total revenue,then the demand for the good must be

• A)unit elastic.
• B)inelastic.
• C)elastic.
• D)None of the above is correct because a price decrease never leads to an increase in total revenue.

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Definitions:

Laissez-Faire Approach

An economic principle advocating minimal government intervention in the marketplace and allowing private sector freedom in economic decisions.

Natural Selection

The biologically based principle that environmental pressures allow certain beneficial traits to be passed on to future generations.

Evolution

The biological process by which genetic mutations are selected for, and against, through environmental pressures.

Organic Analogy

A comparison that likens societies to living organisms, suggesting that each part of society functions in harmony for the maintenance of the whole.