Figure: Price Decrease and Elasticity Refer to the Figure

question 217

Multiple Choice

Figure: Price Decrease and Elasticity Refer to the figure. If price decreases from $20 to $10, total revenue will:

• A) decrease by $1,500, so the demand curve is inelastic.
• B) decrease by $2,500, so the demand curve is inelastic.
• C) increase by $1,500, so the demand curve is elastic.
• D) increase by $2,500, so the demand curve is elastic.

---

Definitions:

Marginal Utility

Marginal utility is the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Dollar Spent

A unit of expenditure, often used to discuss the impact or value of spending in terms of economic activity or investment.

Marginal Utility

The increase in satisfaction or useful value obtained from the consumption of yet another unit of a good or service.

Milkshakes

A sweet, cold beverage made from blending milk, ice cream, and flavorings or sweeteners such as butterscotch, caramel sauce, or chocolate syrup.