Skip's Sealcoating Service Increased Its Total Monthly Revenue from $12,000

question 78

Multiple Choice

Skip's Sealcoating Service increased its total monthly revenue from $12,000 to $13,500 when it raised the price of driveway repairs from $600 to $750. The price elasticity of demand for Skip's Sealcoating Service is

• A)0.11.
• B)0.47.
• C)1.12.
• D)2.11.

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Definitions:

Total-revenue Curve

A graphical representation showing how the total revenue of a firm changes as the quantity sold of its product varies.

Linear Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, characterized by a straight line.

Unit Elastic

A situation where a change in price leads to an equivalent proportional change in quantity demanded or supplied.

University Chamber Music Society

An organization within a university that promotes the performance and appreciation of chamber music among students and the community.