Suppose the Price of a Good Is $5 and Quantity

question 29

Multiple Choice

Suppose the price of a good is $5 and quantity demanded is 10 units. When price increases to $6, quantity demanded decreases to 9 units. What happened to total revenue and what does this indicate?

• A) Total revenue decreased from $54 to $50, indicating that demand is inelastic.
• B) Total revenue decreased from $54 to $50, indicating that demand is elastic.
• C) Total revenue increased from $50 to $54, indicating that demand is inelastic.
• D) Total revenue increased from $50 to $54, indicating that demand is elastic.

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Definitions:

Fund Financial Statements

Financial reports that detail the income, expenditures, and other financial activities of a specific fund within an organization.

Facility Closure

The process of permanently shutting down operations at a business location, often involving asset disposal and employee layoffs.

Proprietary Funds

Funds typically used in governmental accounting to account for business-like activities, where the government intends to recover costs through user charges.