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:

Informed Judgment Forecasts

Predictions about future events, trends, or behaviors made by experts using their knowledge and experience.

Generally Unreliable

Characterizes information or sources that often fail to provide accurate or dependable results or outcomes.

Fast And Inexpensive

Describes a process, solution, or service that requires minimal time and financial investment to accomplish or acquire.

Top Management

Responsible for controlling and overseeing the entire organization, setting overarching goals, and making high-level decisions.