Consider a Good with a Price Elasticity Equal to 1

question 69

Multiple Choice

Consider a good with a price elasticity equal to 1 at every point on its demand curve.Which of the following statements is correct?

• A)Total revenue always rises exactly in proportion to a drop in the price.
• B)Total revenue always rises exactly in proportion to a rise in the price.
• C)Total revenue does not change if the price changes.
• D)Total revenue drops to zero whenever the price rises.
• E)Total revenue always doubles if the price drops.

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