(P $$pageTag$$ ) Refer to the Above Graph

question 8

Multiple Choice

(p. $$pageTag$$ ) Refer to the above graph. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively

• A) inelastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A).
• B) elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A).
• C) elastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G).
• D) inelastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F +

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Definitions:

Mark-up on Cost

The percentage added to the cost of goods to cover overhead and profit; the difference between the cost of a product and its selling price.

Operating Expenses

The day-to-day expenses involved in running a business, such as rent, utilities, and payroll, crucial for maintaining operations.

Office Furniture

Furniture engineered for use in a workplace setting, including desks, chairs, and filing cabinets.

Mark-up

The supplementary cost added to goods for overhead coverage and profit realization.