All Else Equal, If a Firm Raises Its Price by 20

question 166

Multiple Choice

All else equal, if a firm raises its price by 20 percent and the firm's total revenue falls by 20 percent,

• A) demand must be elastic.
• B) demand must be inelastic.
• C) demand must be unit elastic.
• D) the price elasticity of demand must be equal to 1.

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Definitions:

Labour

The human effort, whether physical or mental, contributed towards the production of goods or services in an economy.

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Financial assets or resources that individuals or organizations use to fund their operations and invest in their businesses.

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The latest advancements or innovations in technology that offer improved solutions or efficiency.