P Is in Dollars and Q Is the Number of Units

question 51

Multiple Choice

p is in dollars and q is the number of units. Find the elasticity of the demand function at and use it to determine how a price increase will affect total revenue. ​

• A) Since the demand is elastic, an increase in price will decrease the total revenue.
• B) Since the demand is elastic, an increase in price will increase the total revenue.
• C) Since the demand is inelastic, an increase in price will decrease the total revenue.
• D) Since the demand is inelastic, an increase in price will increase the total revenue.
• E) No change in revenue.

---

Definitions:

Divisor

A mathematical component used in indices to adjust the index value, catering for changes in stock splits or similar adjustments.

Stocks

Shares of ownership in a company, entitling the shareholder to a portion of the company's profits and assets.

Repurchase Agreements

Short-term borrowing for dealers in government securities, where the dealer sells the securities to investors usually overnight and buys them back the following day at a slightly higher price.

Government Securities

Debt instruments issued by a government to finance its operations and projects, typically considered safe investments.