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.

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Definitions:

Ronald Reagan

The 40th President of the United States (1981-1989) known for his economic policies known as "Reaganomics," the end of the Cold War, and conservative political ideology.

Herbert Hoover

The 31st President of the United States (1929-1933), whose term was notably marked by the onset of the Great Depression.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, characterized by high unemployment, deflation, and a significant fall in economic activity.

Economic Expansion

A phase of the business cycle where the economy grows and increases its output, leading to higher employment and income levels.