If Supply Decreases and Total Revenue in an Industry Increases

question 30

Multiple Choice

If supply decreases and total revenue in an industry increases,

• A)demand elasticity must be equal to 1.
• B)demand must be horizontal.
• C)demand elasticity must be greater than 1.
• D)we have a perfectly implausible situation.
• E)demand elasticity must be less than 1.

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Definitions:

Controlled Variable

A factor in an experiment which is kept constant to test the relative impact of an independent variable.

Placebo Effect

The phenomenon in which a person's symptoms can improve due to their belief in the efficacy of a treatment with no therapeutic value.

Debriefing

A process of questioning and informing participants about the purpose and methods of a study after their participation is complete.

Cognitive Flexibility

The mental ability to switch between thinking about different concepts or to think about multiple concepts simultaneously, important for problem-solving and adapting to new situations.