Which of the Following Statements Is True

question 42

Multiple Choice

Which of the following statements is true?

• A)When a firm lowers the price of its product, total revenue always falls.
• B)When a firm raises the price of its product, total revenue always rises.
• C)When a firm raises the price of its product, total revenue always falls.
• D)When a firm lowers the price of its product, total revenue always rises.
• E)When a firm lowers the price of its product, the impact on total revenue depends upon whether the good is elastic, inelastic, or unit elastic in demand.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold (COGS), indicating the basic profitability of a company's core activities.

Indirect Expenses

Expenses that are not directly tied to a specific product or service but are necessary for the overall operation of a business.

Direct Expense

A cost that can be directly attributed to the production or sale of specific goods or services in a business.

Indirect Expense

Costs that are not directly tied to a specific product or service but are necessary for the overall operation of a business, such as utilities or rent.