Suppose That Demand Is Inelastic Within a Certain Price Range

question 170

Multiple Choice

Suppose that demand is inelastic within a certain price range.For that price range,

• A)an increase in price would increase total revenue because the decrease in quantity demanded is proportionately less than the increase in price.
• B)an increase in price would decrease total revenue because the decrease in quantity demanded is proportionately greater than the increase in price.
• C)a decrease in price would increase total revenue because the increase in quantity demanded is proportionately smaller than the decrease in price.
• D)a decrease in price would not affect total revenue.

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Definitions:

Product Life Cycle

The stages through which a product moves from its introduction into the market through its growth, maturity, and eventual decline.

Maturation

The process of growth and development, either in biological organisms or in organizations as they evolve and reach full potential.

Diffuse

To spread or scatter widely or thinly; often relating to the dissemination of ideas or technologies.

Try-demo Units

Sample products or systems that are offered for trial use to demonstrate their capabilities or features before a purchase decision is made.