If a Product Has an Inelastic Demand and the Manufacturer

question 55

Multiple Choice

If a product has an inelastic demand and the manufacturer raises its price,

• A) total revenue will increase.
• B) quantity demanded will decrease.
• C) the demand schedule will shift.
• D) the demand will become more inelastic.
• E) total revenue will decrease.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often with dividend payment preference.

Deductible Corporate Expense

Expenses that a corporation can subtract from its gross income to reduce its taxable income, according to tax laws.

Stock Dividend

A dividend payment made by a company to its shareholders in the form of additional shares rather than a cash payout.

Total Assets

The sum of all assets owned by a company, including both current and non-current assets.