If a Price Increase Leads to a Reduction in Total

question 37

Multiple Choice

If a price increase leads to a reduction in total revenue, then the price elasticity of demand due to the price change is

• A) inelastic.
• B) elastic.
• C) unitary elastic.
• D) perfectly inelastic.

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Definitions:

Laissez-Faire

An economic philosophy of free-market capitalism that opposes government intervention in business affairs, advocating for a "let do" or "let people do as they please" approach.

Consideration

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Exclusive Dealing Contract

An agreement where one party agrees to buy goods exclusively from another party, thereby preventing the seller from selling to others.

UCC

Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, making business operations more uniform across states.