If the Supply of a Good Decreases and It Causes

question 174

Multiple Choice

If the supply of a good decreases and it causes total revenue to increase,this shows that the good has an

• A) inelastic demand
• B) elastic demand
• C) unit elastic demand
• D) inelastic supply
• E) elastic supply

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Definitions:

Cross Elasticity

A measure of the responsiveness of the demand for one product in relation to a change in the price of another product.

Substitutes

Goods or services that can be used in place of each other.

Elastic

A term that describes the sensitivity of the demand for a good or service to a change in its price, with "elastic" demand being significantly responsive to price changes.

Least Elastic

Describes a situation where there is the smallest responsiveness of the quantity demanded or supplied to changes in price, typically associated with goods and services for which there are no close substitutes.