Figure 5-11 -Refer to Figure 5-11.When Price Falls from $50 to $40,it

question 150

Multiple Choice

Figure 5-11
-Refer to Figure 5-11.When price falls from $50 to $40,it can be inferred that demand between those two prices is

• A) inelastic,since total revenue decreases from $8,000 to $5,000.
• B) inelastic,since total revenue increases from $5,000 to $8,000.
• C) elastic,since total revenue increases from $5,000 to $8,000.
• D) unit elastic,since total revenue does not change.

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Definitions:

Government Spending

The total amount of public sector expenditure on goods and services, including salaries, defense, and welfare programs.

Gross Domestic Product

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Operating Leverage

The degree to which a firm relies on fixed costs in its operations, affecting its potential income variability.

Financial Leverage

The use of borrowed money to increase the potential return of an investment.