'When price elasticity of demand is unitary elastic, a slight increase in price will cause total revenue to A decrease. B increase. not change at all.'
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When price elasticity of demand is unitary elastic, it means that the percentage change in quantity demanded is equal to the percentage change in price. Show more…
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Think back to our discussions of changes in total revenue and price and how the concept of elasticity was used. When a firm decreases price and demand is elastic, the percentage change in quantity demanded will be A) ______________ (greater than / less than) the percentage change in price. Therefore, revenue will B) ______________ (increase / decrease). If the demand is inelastic, total revenue will C) ______________ (increase / decrease) when price decreases.
Jennifer S.
If an increase in the supply of a product results in a decrease in the price, but no change in the actual quantity of the product exchanged, then: A) the price elasticity of supply is zero. B) the price elasticity of supply is infinite. C) the price elasticity of demand is unitary. D) the price elasticity of demand is zero.
How would the following changes in price affect total revenue? That is, would total revenue increase, decrease, or remain unchanged? a. Price falls and demand is inelastic. b. Price rises and demand is elastic. c. Price rises and supply is elastic. d. Price rises and supply is inelastic. e. Price rises and demand is inelastic. f. Price falls and demand is elastic. g. Price falls and demand is of unit-elasticity.
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