Price Elasticity of Demand Quiz
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Questions and Answers

When is demand considered elastic?

  • When the slope of the demand curve is constant
  • When the percentage change in price is greater than the percentage change in quantity demanded
  • When marginal revenue is positive
  • When the percentage change in quantity demanded is greater than the percentage change in price (correct)

    • What does it mean when demand is inelastic?

  • The percentage change in quantity demanded is less than the percentage change in price (correct)
  • Marginal revenue is negative
  • The slope of the demand curve is constant
  • Total revenue increases when quantity increases

    • What is the relationship between marginal revenue and total revenue when marginal revenue is negative?

  • Total revenue increases when quantity increases
  • Total revenue decreases when quantity increases (correct)
  • Marginal revenue must be less than price for all units
  • Marginal revenue is equal to 0

    • When is total revenue maximized in relation to marginal revenue?

    <p>Marginal revenue is equal to 0</p> Signup and view all the answers

    What does the slope of the demand curve indicate when the price is higher?

    <p>The demand is more elastic</p> Signup and view all the answers

    When is demand considered inelastic?

    <p>When the percentage change in quantity demanded is less than the percentage change in price</p> Signup and view all the answers

    What does the slope of the demand curve indicate when the price is higher?

    <p>The demand is less elastic</p> Signup and view all the answers

    When is total revenue maximized in relation to marginal revenue?

    <p>When marginal revenue is zero</p> Signup and view all the answers

    What is the relationship between marginal revenue and total revenue when marginal revenue is negative?

    <p>Total revenue decreases as quantity increases</p> Signup and view all the answers

    What does it mean when demand is elastic?

    <p>The percentage change in quantity demanded is greater than the percentage change in price</p> Signup and view all the answers

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