Consider the Demand Curve Above

question 196

Multiple Choice

Consider the demand curve above. If area 0ABC is smaller than area 0DEF, it suggests that if the price increases from OD to OA, then total revenues of sellers will

• A)increase.
• B)decrease.
• C)remain constant.
• D)equal zero.

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Definitions:

Demand

The desire and ability of consumers to purchase goods and services at given prices, influencing market equilibrium and pricing strategies.

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, typically identified by a fall in GDP in two successive quarters.

Keynes

Pertains to John Maynard Keynes, an English economist whose theories revolutionized macroeconomic practice and government economic strategies.

Aggregate Supply

The nation’s total output of goods and services.