The Demand for a Good Is Elastic If

question 60

Multiple Choice

The demand for a good is elastic if

• A)an increase in price leads to a decrease in total revenue
• B)an increase in price leads to an increase in total revenue
• C)an increase in price causes no change in total revenue
• D)total revenue is maximum
• E)total revenue is minimum

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Definitions:

Deregulation

Deregulation is the process of removing or reducing government restrictions and regulations in industries to encourage more competition and efficiency.

Regulatory Capture

A situation where regulatory agencies are dominated by the very industries they are charged with regulating, leading to favorable outcomes for the industry.

Regulatory Agency

An agency, commission, or board established by the federal government or a state government to control the prices charged and the services offered by a natural monopoly or public utility.

Principal-Agent Problem

A dilemma in economics where one party (the agent) is supposed to act in the best interest of another party (the principal) but may have different goals.