Which of the Following Statements Is True

question 21

Multiple Choice

Which of the following statements is true?

• A)Whenever a firm raises its price its total revenue will increase.
• B)When a firm lowers its price its total revenue may either increase or decrease.
• C)Whenever a firm increases its quantity sold its revenue will increase.
• D)Total revenue will equal zero when the demand for a product is unit elastic.

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Definitions:

Rational Decisions

Choices made by individuals that align with their own self-interest and are based on an evaluation of the costs and benefits of the action.

Marginal Costs

The extra financial burden of generating one additional unit of a good or service.

Marginal Benefits

The incremental satisfaction or advantage obtained from the consumption of an additional unit of a good or service.

Marginal Cost

Marginal cost is the increase in total production cost that arises from producing one additional unit of a good or service.