If a Firm's Total Revenue DECREASES When the Price of Its

question 15

Multiple Choice

If a firm's total revenue DECREASES when the price of its product is reduced from $80 to $40, the demand for this product between these two prices is:

• A) unitary elastic.
• B) inelastic.
• C) elastic.
• D) Cannot tell from what is given.

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Definitions:

Withdrawals

Money or assets taken from a business by its owner(s) for personal use, typically reducing the total equity.

Cash

Liquid currency and assets readily convertible to currency, used by businesses to conduct transactions.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the owners' claim on the business assets.

Withdrawals

Funds taken out from a business by its owner(s) for personal use, which reduce the capital accounts in the company’s equity section.