If a Firm Raises Its Price and Total Revenue Increases

question 84

Multiple Choice

If a firm raises its price and total revenue increases, then the price elasticity is:

• A) elastic.
• B) unit elastic.
• C) inelastic.
• D) absolute.

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Definitions:

Marginal Cost

The change in total production cost that arises when the quantity produced is incremented by one unit.

Demand Curve

A diagram demonstrating how the price of an item correlates with the volume that consumers are ready to acquire at assorted prices.

Marginal Revenue Curve

A visual depiction illustrating the changes in marginal revenue as the level of produced output fluctuates.

Marginal Revenue

Marginal revenue is the additional income generated from selling one more unit of a good or service, crucial for determining the optimal level of output for a company.