All Else Equal, If a Firm Raises Its Price by 20

question 166

Multiple Choice

All else equal, if a firm raises its price by 20 percent and the firm's total revenue falls by 20 percent,

• A) demand must be elastic.
• B) demand must be inelastic.
• C) demand must be unit elastic.
• D) the price elasticity of demand must be equal to 1.

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