If the Demand for a Good Is Price Inelastic,a Decrease

question 98

Multiple Choice

If the demand for a good is price inelastic,a decrease in total revenue from the good would result from a(n)

• A)increase in price
• B)decrease in quantity demanded
• C)favorable shift in tastes and preferences
• D)decrease in price
• E)increase in consumers' incomes

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are accessible to all without diminishing availability to others, such as public parks or national defense.

Ability-To-Pay Philosophy

A principle that asserts taxes should be levied based on an individual's or entity's capacity to pay, implying those with higher income or wealth should pay more in taxes.

Progressive Income Tax

A tax system in which the tax rate increases as the taxable income increases, imposing higher rates on those with higher incomes.

Taxation

The process by which a government levy charges on citizens or corporate entities to finance government spending and activities.