If a Change in Price Causes Total Revenue to Change

question 207

Multiple Choice

If a change in price causes total revenue to change in the same direction,we can conclude that the demand is:

• A)price inelastic.
• B)price elastic.
• C)price unit-elastic.
• D)zero elastic.

---

Definitions:

Perfectly Inelastic

A market situation where the quantity demanded or supplied does not change in response to a change in price.

Elasticity of Demand

An indicator of the responsiveness of the quantity of a product demanded to its price alterations.

Total Revenue

The total income a firm receives from the sale of its products, calculated as the price per unit times the number of units sold.

Inelastic

A demand is considered inelastic when it does not significantly change with the price of a good or service, indicating that consumers are relatively insensitive to price changes.