Suppose That the Price of a Good Is $10 and Quantity

question 3

Multiple Choice

Suppose that the price of a good is $10 and quantity demanded is 50 units. When price decreases to $8, quantity demanded increases to 60 units. What happened to total revenue and what does this indicate?

• A) Total revenue decreased from $500 to $480, indicating that demand is inelastic.
• B) Total revenue decreased from $500 to $480, indicating that demand is elastic.
• C) Total revenue increased from $480 to $500, indicating that demand is inelastic.
• D) Total revenue increased from $480 to $500, indicating that demand is elastic.

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Definitions:

Certified Cheque

A cheque guaranteed by a bank, assuring the recipient that the writer has sufficient funds available for the transaction.

Method Of Payment

A method of payment refers to the way in which a buyer chooses to compensate the seller of a good or service, typically including options such as cash, credit cards, checks, or electronic transfers.

Closing Date

The day on which a property sale is concluded, with the transfer of ownership from the seller to the buyer.

Implied Term

A provision in a contract that is not explicitly stated but is assumed to be included to ensure the fair and effective functioning of the contract.