When Demand Is Inelastic, a Decrease in Price Increases Total

question 22

True/False

When demand is inelastic, a decrease in price increases total revenue.

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Definitions:

Market Demand Curve

A graphical representation that shows the quantity of goods that consumers in a market are willing to buy at different prices.

Herfindahl-Hirschman Index (HHI)

A measure of market concentration that is calculated by squaring the market share of each firm competing in a market and then summing the squares.

Unconcentrated

Refers to a market or industry where no single entity has a large market share, leading to a high level of competition.

Highly Concentrated

A market condition where a small number of firms hold a large market share.