The Total Revenue Test Says I) Demand Is Elastic If

question 54

Multiple Choice

The total revenue test says i) Demand is elastic if a decrease in price results in an increase in total revenue.
Ii) Total revenue is maximized when demand is elastic.
Iii) Total revenue is minimized when demand is unit elastic.

• A)i only
• B)i and ii
• C)ii and iii
• D)i, ii and iii
• E)ii only

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Definitions:

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of an asset evenly across its useful life.

Residual Value

The estimated value that an asset will realize upon its disposal at the end of its useful life.

Depreciation Adjustment

A financial accounting process that allocates the cost of a tangible asset over its useful life to account for the decline in its value.