As You Move Up Along a Straight-Line Demand Curve

question 332

Multiple Choice

As you move up along a straight-line demand curve,

• A) the price elasticity of demand decreases in size.
• B) the price elasticity of demand increases in size.
• C) total revenue always decreases.
• D) total revenue always increases.
• E) total revenue never changes.

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Definitions:

Competitive Price-searcher

An economic term for a seller that sets its product prices based on what competitors are charging, within a competitive market environment.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.

Control Over Price

The ability of a person or organization to influence the price at which goods or services are sold.

Contestable Market

A market structure where there are no barriers to entry or exit, ensuring that prices remain competitive even in the absence of a large number of sellers.