An Increase in Product Price Will Cause

question 336

Multiple Choice

An increase in product price will cause

• A) quantity demanded to decrease.
• B) quantity supplied to decrease.
• C) quantity demanded to increase.
• D) the supply curve to shift to the left.

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Definitions:

Midpoint Formula

A mathematical method used to calculate the elasticity of demand or supply, measuring the percentage change in quantity relative to a percentage change in price.

Unit Elastic

A situation in which the percentage change in quantity demanded or supplied is exactly equal to the percentage change in price.

Total Revenue

The total revenue produced from the sales of products or services that are central to a company's main business activities.

Unit Elastic

Describes a situation in which the percentage change in quantity demanded or supplied is equal to the percentage change in price, resulting in no change in total revenue.