Consider a good with a price elasticity equal to 1 at every point on its demand curve. Which of the following statements is correct?
a. Total revenue always rises exactly in proportion to a drop in the price.
b. Total revenue always rises exactly in proportion to a rise in the price.
c. Total revenue does not change if the price changes.
d. Total revenue drops to zero whenever the price rises.
e. Total revenue always doubles if the price drops.
C
Economics
You might also like to view...
A decrease in the labor force shifts the production possibilities frontier inwards over time
Indicate whether the statement is true or false
Economics
Consumer surplus:
a. does not exist in equilibrium. b. is illustrated by the area under the demand curve and above the market price. c. is illustrated by the area under the demand curve and below the market price. d. is illustrated by the area above the supply curve and under the demand curve.
Economics