Which of the Following Occurs When an Increase in Sales

question 82

Multiple Choice

Which of the following occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?

• A)inelastic demand
• B)functional elasticity of demand
• C)unitary elasticity
• D)highly elastic demand

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Definitions:

Rational Individuals

The concept that individuals make decisions based on the maximization of their utility or benefit, taking into consideration all available information and factors.

Preferences

The individual tastes and choices made by consumers in regard to different goods and services.

Macroeconomics

The part of economics concerned with the performance and behavior of the economy as a whole. Focuses on economic growth, the business cycle, interest rates, inflation, and the behavior of major economic aggregates such as the household, business, and government sectors.

Microeconomics

The part of economics concerned with (1) decision making by individual units such as a household, a firm, or an industry and (2) individual markets, specific goods and services, and product and resource prices.