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Assume that the price elasticity of demand is −0.5 for a product. If the price decreases, the total revenue will:

a. decrease

b. increase

c. remain constant

d. Any of the above based on the magnitude of price decrease

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Yusra AneesLv10
23 Dec 2020
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Related questions

If the price elasticity of demand for a product is -5, and the income elasticity of demand for the product is 2.5. If a 0.5% decrease in product price is accompanied by a 1% decrease in consumer income, the firm's total sales will

a. increase

b. be the same

c. decrease

d. decrease and then increase

In which of the following situations will total revenue increase?

A. Price elasticity of demand is 1.2, and the price of the good decreases.

B. Price elasticity of demand is 0.5, and the price of the good increases.

C. Price elasticity of demand is 3.0, and the price of the good decreases.

D. All the above.

1. An increase in the price of a good will

a. increase quantity demanded

b. increase demand

c. decrease demand

d. decrease quantity demanded

 

2. An increase in the price of good will

a. decrease quantity supplied

b. increase quantity supplied

c. decrease supply

d. increase supply

 

3. An increase in price causes an increase in total revenue when demand is

a. inelastic

b. elastic

c. unit elastic

d. all of the above

 

4. Which of the following could be the price elasticity of demand for a good for which a price increase would decrease revenue?

a. 1.0

b. 0.6

c. 2.6

d. 0.9

 

5. Other things equal, when the price of good falls, the

a. quantity supplied of good increases

b. demand increases

c. supply decreases

d. quantity supplied of the good decreases

 

 

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