Assume the Demand for a Good Is Elastic

question 331

Multiple Choice

Assume the demand for a good is elastic. If the price of the good decreases, then total revenue

• A) decreases.
• B) remains constant.
• C) increases.
• D) is negative.

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Definitions:

Income

The amount of money received over a period of time, typically as payment for work, goods, or investments.

Cost of Living

The amount of money needed to sustain a certain standard of living by affording basic expenses such as housing, food, taxes, and healthcare.

Utility Function

A representation in economics of how a consumer ranks different goods or services, based on the level of satisfaction they provide.

Consumption

Consumption involves the use of goods and services by households, constituting one of the primary components of economic activity and a key indicator of economic health.