The Total Revenue Test Says That If a Price Decrease

question 48

Multiple Choice

The total revenue test says that if a price decrease leads to

• A) an increase in total revenue, demand is income elastic.
• B) a decrease in total revenue, demand is income inelastic.
• C) a decrease in total revenue, demand is price inelastic.
• D) a decrease in total revenue, supply is price inelastic.
• E) a decrease in total revenue, supply is price elastic.

---

Definitions:

Multiple Subsidiary

Refers to scenarios where a parent company owns more than one subsidiary, each operating as a separate entity but controlled by the parent.

Indirect Acquisition

The process of obtaining control over a company by acquiring another entity that already holds a controlling interest in the target company.

Ownership Interest

A legal or equitable right or stake in an entity, often represented by shares or units, giving the holder a claim on part of the entity's assets and earnings.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.