When Price Rises by 3 Percent and Quantity Demanded Changes

question 79

Multiple Choice

When price rises by 3 percent and quantity demanded changes by 6 percent,

• A)total revenue falls 3 percent.
• B)total revenue falls by half.
• C)total revenue doubles.
• D)total revenue does not change.
• E)total revenue increases 18 percent.

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Definitions:

Average Variable Cost

The cost per unit of variable inputs divided by the total quantity of output produced.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Quantity of Output

The total amount of goods or services produced by a firm or economy over a specific period.

Total Cost

The total expenses involved in creating goods or services, encompassing both constant and changeable costs.