Figure: the Linear Demand Curve

question 128

Essay

Figure: The Linear Demand Curve
(Figure: The Linear Demand Curve) Look again at the figure The Linear Demand Curve.If you currently sell scarves at $7 and you increase the price to $8, your total revenue will ,
and you notice that your price elasticity of demand is _.
A.increase; elastic
B.decrease; elastic
C.increase; inelastic
D.decrease; inelastic

---

Definitions:

Total Revenue

Total revenue refers to the entire amount of money generated by a firm or entity from its business activities, such as sales of goods or services, before any expenses are subtracted.

Ideally

In a perfect or most suitable way, often used to describe an optimal condition or scenario.

Very Elastic

A description of a demand or supply curve which shows that the quantity demanded or supplied changes significantly as price changes.

Unit Elastic

A situation in which a one percent change in price causes an equal percentage change in quantity demanded or supplied.