If Price Is Cut and Demand Is Inelastic, Total Revenue

question 29

Multiple Choice

If price is cut and demand is inelastic, total revenue will fall because

• A)the change in quantity demanded is less than the percent change in price.
• B)the percent change in quantity demanded is less than the change in price.
• C)the percent change in quantity demanded is less than the percent change in price.
• D)customers can find substitutes.

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Definitions:

Strategic Outsourcing

The process of contracting out specific business functions or processes to a specialized external service provider in order to improve efficiency, reduce costs, or focus on core competencies.

Strategy Implementation

The execution phase where strategies and plans are put into action to achieve the organizational goals and objectives.

Strategic Analysis

An evaluation of an organization's external and internal environments to formulate strategies for competitive advantage.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with higher elasticity indicating greater responsiveness.