If Demand Is Elastic, an Increase in Price

question 23

Multiple Choice

If demand is elastic, an increase in price

• A)will increase total revenue.
• B)will decrease total revenue.
• C)will have an indeterminate effect on total revenue.
• D)will decrease total profit.

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Definitions:

Elapses

Refers to the passage of time or the process of something coming to an end or expiring.

Inelastic Demand

Describes a situation where the demand for a good or service changes little when its price changes.

Total Revenue

The total amount of money generated from the sale of goods or services.

Decrease

A reduction in quantity, size, intensity, or the number of something.