When demand is elastic,
A) changes in price and changes in total revenue move in the same direction.
B) there is no relationship between changes in price and changes in total revenue.
C) changes in price and changes in total revenue move in opposite directions.
D) for any change in price, total revenue will not change.
C
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At a certain level of production, the marginal revenue and marginal cost of a monopolist are $8 and $6, respectively. Which of the following statements is true in this context?
A) The monopolist should expand production. B) The monopolist should contract production. C) The profits of the monopolist are maximized. D) The profits of the monopolist are minimized.
Which of the following best summarizes the essence of the Invisible Hand Theorem?
a. Competitive markets guarantee that any shortages or surpluses existing in an economy will be quickly eliminated. b. Of all the possible economic systems, competitive markets are the most philosophically compatible with democracy and freedom. c. Within competitive markets, people who selfishly pursue their own interests end up achieving a socially desirable outcome. d. The social gain created by competitive markets is second only to what a hypothetical benevolent dictator could achieve.