Suppose When Nablom's Bakery Raised the Price of Its Breads

question 240

Multiple Choice

Suppose when Nablom's Bakery raised the price of its breads by 10 percent, the quantity demanded fell by 15 percent.What was the effect on sales revenue?

• A)Sales revenue increased.
• B)Sales revenue remained unchanged.
• C)Sales revenue decreased.
• D)It cannot be determined without information on prices.

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Definitions:

Excise Tax

A tax imposed on specific goods, services, or transactions, often aimed at discouraging their use or raising government revenue.

Consumers

Individuals or entities that purchase goods or services for personal use and not for manufacture or resale.

Producers

Entities or individuals involved in the creation of goods or services for the market.

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved.