If Demand Is Unitary Elastic, What Happens to Total Revenue

question 323

Multiple Choice

If demand is unitary elastic, what happens to total revenue if the price increases by 5%?

• A) It increases by 5%.
• B) It decreases by 5%.
• C) It decreases by less than 5%.
• D) It stays the same.

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Definitions:

Normal Fault

A type of fault where the hanging wall has moved downward relative to the footwall, typically associated with extensional tectonics.

Horizontal Compression

A stress regime where forces push inwards from opposite sides, often leading to folding, faulting, or shortening of the Earth's crust.

Horizontal Tension

The stress exerted in a horizontal direction, often leading to stretching and thinning of the crust.

Confining Pressure

The pressure applied to a rock from all directions beneath the Earth's surface, often affecting the rock’s physical properties and deformation.