Given a Downward-Sloping Linear Demand Curve, If Total Revenue Decreases

question 304

Multiple Choice

Given a downward-sloping linear demand curve, if total revenue decreases as quantity rises, marginal revenue must be

• A)positive and demand is elastic.
• B)negative and demand is elastic.
• C)positive and demand is inelastic.
• D)negative and demand is inelastic.

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Definitions:

Bank Vaults

Secure rooms where banks and other financial institutions store money, valuable documents, and other assets.

Fed

Short for the Federal Reserve, the central banking system of the United States, which regulates the U.S. monetary and financial system.

Open Market

An economic system with no barriers to free market activities, where securities, goods, and services can be traded openly.

Excess Reserves

The amount of reserves that a bank holds beyond the minimum required by regulation or central bank policy, which can be loaned out to generate profit.