The Actual Value of Price Elasticity of Demand

question 60

Multiple Choice

The actual value of price elasticity of demand

• A) measures the relative change in quantity demanded when there is a change in price.
• B) will change when the units good is measured in changes.
• C) varies with changes in supply.
• D) is always negative.

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Definitions:

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Price Taker

An economic term referring to a company or an individual that cannot control the market price of its product and must accept the prevailing market price.

Total Revenue

The aggregate revenue a corporation generates from sales or services in a given time frame.

Economic Profits

The profit a company makes after accounting for both the explicit costs of production and the opportunity costs of capital.