A Decrease in Price Causes

question 74

Multiple Choice

A decrease in price causes:

• A) a quantity effect, which is an increase in revenue that results from selling fewer units of the good.
• B) a price effect, which is an increase in revenue that results from receiving a lower price for each unit sold.
• C) both a price effect and quantity effect.
• D) a decrease in quantity demanded.

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Definitions:

Corporate Income Tax

Taxes imposed on the income or profit of corporations and other business entities by government authorities.

Outlet Stores

Retail stores that sell products directly from manufacturers at reduced prices, often overstock or discontinued lines.

Return On Total Assets

A measure of the profitability of assets, without regard to the equity of creditors and stockholders in the assets.

Sales

The transactions involving the exchange of goods or services for money, representing a critical source of revenue for businesses.