Total revenue will decrease when
A. the price elasticity of demand equals 1.20 and price rises.
B. price and quantity change in opposite directions.
C. the price elasticity of demand is negative.
D. the price elasticity of demand equals 1.00 and price falls.
Answer: A. the price elasticity of demand equals 1.20 and price rises.
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Since reserve requirements on time and savings deposits were phased out in the early 1990s,
a. only the M1 money multiplier is affected by increases in time and savings deposits. b. only the M2 money multiplier is affected by increases in time and savings deposits. c. neither the M1 nor the M2 money multipliers are affected by increases in time and savings deposits. d. both the M1 and M2 money multipliers are affected by increases in time and savings deposits.
The basic purpose of economic models is to:
a. construct simplifying assumptions about the real world. b. explain reality in all its complexity. c. construct situations where controlled experiments can be carried out. d. provide explanations for, and predictions of the relationship between variables.