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When demand is inelastic and the price of a good increases, what happens to total revenue?
When demand is inelastic and the price of a good increases, what happens to total revenue?
What is the outcome when the price falls for a good with elastic demand?
What is the outcome when the price falls for a good with elastic demand?
Which of the following conditions describes the scenario when demand is unit elastic?
Which of the following conditions describes the scenario when demand is unit elastic?
If the demand for a product is perfectly inelastic, what would happen to total revenue when the price increases?
If the demand for a product is perfectly inelastic, what would happen to total revenue when the price increases?
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What is the relationship between price increases and total revenue when demand is elastic?
What is the relationship between price increases and total revenue when demand is elastic?
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Which statement is true regarding demand elasticity when total revenue remains unchanged?
Which statement is true regarding demand elasticity when total revenue remains unchanged?
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For inelastic demand, what happens to total revenue if the price falls?
For inelastic demand, what happens to total revenue if the price falls?
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Which of the following statements about inelastic demand is accurate?
Which of the following statements about inelastic demand is accurate?
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What does it indicate if an increase in price results in no change in total revenue?
What does it indicate if an increase in price results in no change in total revenue?
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If the demand for a product is inelastic and the price is increased, what happens to total revenue?
If the demand for a product is inelastic and the price is increased, what happens to total revenue?
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When the price of DVDs increases by 10 percent and total revenue increases by 20 percent, how is the demand characterized?
When the price of DVDs increases by 10 percent and total revenue increases by 20 percent, how is the demand characterized?
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If surfboard manufacturers see their total revenue increase by $2 million when the price per surfboard decreases by $10, how is price elasticity of demand affected?
If surfboard manufacturers see their total revenue increase by $2 million when the price per surfboard decreases by $10, how is price elasticity of demand affected?
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What can be inferred if a 20 percent decrease in price leads to a 15 percent increase in quantity demanded?
What can be inferred if a 20 percent decrease in price leads to a 15 percent increase in quantity demanded?
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When total revenue changes inversely with price, what type of demand does this suggest?
When total revenue changes inversely with price, what type of demand does this suggest?
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How does a decrease in price of a good lead to less than proportional increase in quantity demanded indicate demand elasticity?
How does a decrease in price of a good lead to less than proportional increase in quantity demanded indicate demand elasticity?
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In terms of total revenue, what does a unit elastic demand imply when the price changes?
In terms of total revenue, what does a unit elastic demand imply when the price changes?
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What characterizes a price elastic demand?
What characterizes a price elastic demand?
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If a good has a price elasticity of demand greater than 1, this indicates that the demand is:
If a good has a price elasticity of demand greater than 1, this indicates that the demand is:
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In a scenario where pumpkin prices rise by 10% and demand decreases from 2 million to 1.5 million, the type of demand is classified as:
In a scenario where pumpkin prices rise by 10% and demand decreases from 2 million to 1.5 million, the type of demand is classified as:
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What does a price elasticity of demand of 2.4 for peanut butter indicate?
What does a price elasticity of demand of 2.4 for peanut butter indicate?
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If demand is perfectly elastic, what happens to quantity demanded when there is a price change?
If demand is perfectly elastic, what happens to quantity demanded when there is a price change?
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What should happen to total revenue when the price decreases for a product with elastic demand?
What should happen to total revenue when the price decreases for a product with elastic demand?
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If the price of a product increases and the quantity demanded decreases, which conclusion can be drawn about the product's demand?
If the price of a product increases and the quantity demanded decreases, which conclusion can be drawn about the product's demand?
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The demand for a good is said to be unit elastic when the price elasticity of demand is:
The demand for a good is said to be unit elastic when the price elasticity of demand is:
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What happens to Billy Bob's total revenue when the price of a pound of ribs falls from $3 to $1?
What happens to Billy Bob's total revenue when the price of a pound of ribs falls from $3 to $1?
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What type of demand is exhibited by Billy Bob's ribs from $1 to $3 per pound?
What type of demand is exhibited by Billy Bob's ribs from $1 to $3 per pound?
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When will an increase in the price of ribs lead to a decrease in total revenue?
When will an increase in the price of ribs lead to a decrease in total revenue?
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At which price point does the demand for Billy Bob's ribs become unit elastic?
At which price point does the demand for Billy Bob's ribs become unit elastic?
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What elasticity is indicated if Redbox raises its price from $2.50 to $3.00?
What elasticity is indicated if Redbox raises its price from $2.50 to $3.00?
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If the price of a product is increased and the quantity demanded decreases significantly, what can be interpreted about the demand state?
If the price of a product is increased and the quantity demanded decreases significantly, what can be interpreted about the demand state?
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Which of the following prices characterizes a situation where the demand for Billy Bob's ribs shows a significant drop in total revenue after a price hike?
Which of the following prices characterizes a situation where the demand for Billy Bob's ribs shows a significant drop in total revenue after a price hike?
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Which factor is primarily responsible for defining the elasticity of demand for Billy Bob's BBQ ribs?
Which factor is primarily responsible for defining the elasticity of demand for Billy Bob's BBQ ribs?
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If the lobster catch in Maine increases significantly, what will happen to the total revenue of fishermen?
If the lobster catch in Maine increases significantly, what will happen to the total revenue of fishermen?
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What impact does an increase in lobster supply have on the price of lobsters?
What impact does an increase in lobster supply have on the price of lobsters?
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If demand for a product is elastic and the price is reduced, what can be expected in terms of total revenue?
If demand for a product is elastic and the price is reduced, what can be expected in terms of total revenue?
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When a restaurant cuts the price of a Caesar salad from $5.00 to $4.00, what is the potential effect on total revenue given that demand varies in elasticity?
When a restaurant cuts the price of a Caesar salad from $5.00 to $4.00, what is the potential effect on total revenue given that demand varies in elasticity?
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What does it imply if the total revenue decreases when the catch of lobster increases while demand is generally inelastic?
What does it imply if the total revenue decreases when the catch of lobster increases while demand is generally inelastic?
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If a technological advance makes corn farms more productive and the demand for corn is price inelastic, what will likely happen to the equilibrium price and total revenue?
If a technological advance makes corn farms more productive and the demand for corn is price inelastic, what will likely happen to the equilibrium price and total revenue?
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Why might a fisherman suffer from lower total revenue even with a large catch?
Why might a fisherman suffer from lower total revenue even with a large catch?
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In the context of demand elasticity, what does it mean for an item to be considered inelastic?
In the context of demand elasticity, what does it mean for an item to be considered inelastic?
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Study Notes
Price Elasticity of Demand
- Demand is price elastic when a relatively small price increase leads to a relatively large decrease in the quantity demanded.
- If the demand for a good is elastic, the price elasticity of demand is greater than 1.
- If the quantity demanded changes by an infinitely large amount for a given change in price, then demand is perfectly elastic.
- When demand is perfectly elastic, the demand curve is horizontal.
- The demand curve for a good is elastic when the price elasticity of demand for that good is greater than 1.
- A decrease in price will lead to an increase in total revenue if demand is elastic.
- Demand is inelastic when a price rise results in total revenue increasing.
- Demand is elastic when a price rise results in total revenue decreasing.
- When demand for a good is inelastic, and its price increases, the total revenue from the sale of the good will increase.
- When demand is inelastic, a decrease in price decreases total revenue.
- If an increase in price results in no change in total revenue, then demand must be unit elastic.
- The price elasticity of demand is greater than 1 if total revenue increases when price decreases.
- The price elasticity of demand is less than 1 if total revenue decreases when price decreases.
- A decrease in price will increase total revenue if demand is elastic.
- If demand is elastic, total revenue decreases when there is an increase in price.
- Total revenue will remain the same if demand is unit elastic and there is a change in price.
- If demand is inelastic, total revenue will increase when there is an increase in price.
- The price elasticity of demand is equal to 0.8 when there is a 10% increase in price and an 8% decrease in demand.
- The price elasticity of demand is equal to 1.2 when there is a 10% increase in price and a 12% decrease in demand.
- The price elasticity of demand is equal to 2.0 when there is a 10% increase in price and a 20% decrease in demand.
- The price elasticity of demand is equal to 0.5 when there is a 10% increase in price and a 5% decrease in demand.
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Description
Test your understanding of price elasticity of demand. This quiz covers key concepts such as elastic and inelastic demand, the effects of price changes on total revenue, and the characteristics of demand curves. Perfect for economics students looking to reinforce their knowledge.
