When Demand Elasticity Is ____ in Absolute Value (Or ____),An

question 19

Multiple Choice

When demand elasticity is ____ in absolute value (or ____) ,an increase in price will result in a(n) ____ in total revenues.

• A) less than 1; elastic; increase
• B) more than 1; inelastic; decrease
• C) less than 1; elastic; decrease
• D) less than 1; inelastic; increase
• E) none of the above

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Definitions:

Laspeyres Price Index

The Laspeyres Price Index measures the change in the price of a basket of goods and services over time, using the quantities of the base period.

Base Year

A specific year chosen as a point of reference or benchmark for economic or financial calculations, such as indexing or comparing prices.

Current Year

The ongoing calendar year during which an event or measurement is taking place.

Laspeyres Price Index

An index that measures the change in the price of a basket of goods and services based on the quantities purchased in a base period.