When Does an Increase in Price Cause an Increase in Total

question 173

Multiple Choice

When does an increase in price cause an increase in total revenue

• A)when demand is elastic
• B)when demand is inelastic
• C)when demand is unit elastic
• D)when demand is perfectly elastic

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Definitions:

Substitutes

Products or services that can satisfy the same need or desire, where an increase in the price of one leads to an increase in demand for the other.

Complements

Goods and services that are used together, where the consumption of one enhances the use or value of the other.

Demand

Demand refers to consumers' desire and willingness to purchase a good or service at a specific price level.

Labor

The deployment of human intellectual and bodily efforts towards the creation of products and services.