When Demand Is Unit Elastic, a Change in Price Causes

question 8

Multiple Choice

When demand is unit elastic, a change in price causes total revenue to stay the same because

• A)the percentage change in quantity demanded exactly offsets the percentage change in price.
• B)buyers are buying the same quantity.
• C)total revenue never changes with price changes.
• D)the change in profit is offset by the change in production cost.

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Definitions:

Stated Interest Rate

The interest rate explicitly stated on a loan or investment agreement, not accounting for compounding.

Face Value

The nominal or dollar value printed on a security or financial instrument, such as a bond or stock certificate, representing its worth at issuance.

Face Value

The nominal value or dollar value printed on a financial instrument like a bond or bill, representing its worth at maturity.

Accrued Interest

Interest that has been earned but not yet paid, typically relating to bonds or loans, accruing daily until the payment date.