If the Demand for Donuts Is Inelastic, Then an Increase

question 128

Multiple Choice

If the demand for donuts is inelastic, then an increase in the price of donuts will

• A)increase total revenue of donuts sellers.
• B)decrease total revenue of donuts sellers.
• C)not change total revenue of donuts sellers.
• D)change total revenue of donuts sellers but in an unknown way without more information.

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Definitions:

Journal Entry

A single record that reflects the debit and credit effects of a financial transaction in the accounting system.

Coupon Rate

The yearly interest yield on a bond, shown as a percent of the bond's nominal value.

Effective-Interest Method

An accounting method to amortize the discount or premium on bonds payable or receivable over the bond's life, reflecting a constant rate of interest.

Market Rate

The current price or interest rate at which a good, service, or financial asset can be bought or sold in a competitive market.