Holding all other forces constant, if increasing the price of a good leads to a decrease in total revenue, then the demand for the good must be
a. unit elastic.
b. inelastic.
c. elastic.
d. None of the above is correct because a price increase always leads to an decrease in total revenue.
c
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If a new government adopted some ill-advised regulations causing the economy to be less efficient ________
A) the ensuing negative supply shock would lead to an immediate rise in inflation B) in the short-run this would create a negative output gap but eventually the previous general equilibrium would be restored by subsequent rightward shifts of the AS curve C) there would be no permanent changes in output and inflation D) all of the above E) none of the above
Refer to the figure. The consumption schedule indicates that:
A. consumers will maximize their satisfaction where the consumption schedule and 45° line intersect.
B. up to a point consumption exceeds income but then falls below income.
C. the MPC falls as income increases.
D. households consume as much as they earn.