_____ Occurs When an Increase in Sales Exactly Offsets a Decrease

question 161

Multiple Choice

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

• A) Inelastic demand
• B) Functional elasticity of demand
• C) Unitary elasticity
• D) Highly elastic demand
• E) Fixed elasticity

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Definitions:

Recessionary Gap

A situation where an economy's real GDP is lower than its potential GDP, indicating underutilized resources.

Inflation Rate

measures the annual percentage increase in the average price level of goods and services across the economy.

Nominal Wages

The amount of money paid to employees without adjustment for inflation, representing the face value of wages at the time of payment.

Real Wages

The purchasing power of wages, adjusted for inflation, reflecting the actual goods and services that money earned as wages can buy.