When a Firm Is on the Inelastic Segment of Its

question 51

Multiple Choice

When a firm is on the inelastic segment of its demand curve, it can

• A) increase total revenue by reducing price.
• B) decrease total costs by decreasing price.
• C) increase profits by increasing price.
• D) increase total revenue by more than the increase in total cost by increasing price.

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Definitions:

Transcontinental Railroad

The railway system completed in 1869 that connected the east and west coasts of the United States, greatly facilitating travel and commerce.

Wilmot Proviso

A proposed, but never enacted, amendment in 1846 that aimed to prohibit slavery in any territory acquired from Mexico, intensifying the pre-Civil War debates over slavery.

Missouri Compromise

Deal proposed by Kentucky senator Henry Clay in 1820 to resolve the slave/free imbalance in Congress that would result from Missouri’s admission as a slave state; Maine’s admission as a free state offset Missouri, and slavery was prohibited in the remainder of the Louisiana Territory north of the southern border of Missouri.

Railway System

A network of tracks on which trains run, serving as a critical infrastructure for the transport of passengers and goods over land, significantly contributing to economic development and urbanization.