Increasing Prices Has No Effect on Total Revenue If a Product's

question 395

Multiple Choice

Increasing prices has no effect on total revenue if a product's demand curve is

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

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Definitions:

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Loss

The negative result from operations or other transactions when costs and expenses exceed revenues.

Unit Product Cost

The total cost (including materials, labor, and overhead) to produce a single unit of product.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a product.