When the Quantity Effect Outweighs the Price Effect

question 145

Multiple Choice

When the quantity effect outweighs the price effect:

• A) a price increase will cause a decrease in total revenue.
• B) a price increase will cause an increase in total revenue.
• C) a price decrease will cause a decrease in total revenue.
• D) None of these is true.

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Definitions:

Abbreviation

A shortened form of a word or phrase used to simplify written and verbal communication.

Pound

A unit of weight in the British imperial and the United States customary systems of measurement, equal to 16 ounces.

Lb

The abbreviation for pound, a unit of mass or weight in the British customary system of measurement.

Gram

A metric unit of mass equal to one-thousandth of a kilogram.