If a Product Has an Elastic Demand, Then We Can

question 55

Multiple Choice

If a product has an elastic demand, then we can expect

• A) total revenue to rise if price falls.
• B) a price increase to increase total revenue.
• C) a smaller percentage change in the quantity demanded given some percentage change in the price.
• D) the absolute value of the elasticity of demand coefficient to be less than 1.
• E) that there are few substitutes for this product.

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Definitions:

Average Cost

The total cost of production divided by the number of goods produced, providing a cost per unit of output.

Marginal Revenue

The incremental revenue resulted from the sale of one more product or service unit.

Total Revenue

The entire amount of income generated by the sale of goods or services.

Color Printer

A device for printing documents and images in color, using a combination of ink or toner.