Question 1

Demand is said to be inelastic when

Accepted Answer

When demand is inelastic, a reduction in price leads to a decrease in total revenue because the percentage decrease in price is greater than the percentage increase in quantity demanded, resulting in less overall revenue.

Question 2

Answer the question based on the following table, which shows a demand schedule.  Total revenues will decrease if price

Accepted Answer

The answer of Answer the question based on the following...

Question 3

Assume that pizza and hamburgers are the only food items available to consumers. If the price of pizza increases, other factors constant, then which of the following will definitely happen?

Accepted Answer

When the price of pizza increases, assuming other factors remain constant, consumers may shift their consumption towards hamburgers as a substitute, potentially increasing the total revenues received by hamburger sellers.

Question 4

Refer to the table above. If the price starts falling from $5, at what price range does demand first become inelastic?

Accepted Answer

The answer of  Refer to the table above. If...

Question 5

In which of the following instances will total revenues decline?

Accepted Answer

The answer of In which of the following instances will...

Question 6

Refer to the table above. What is the price that yields the maximum total revenue?

Accepted Answer

The answer of  Refer to the table above. What...

Question 7

Consider the demand curve above. If the price is OA, then the total revenues of sellers would be the area

Accepted Answer

The answer of  Consider the demand curve above. If...

Question 8

Answer the question based on the following table, which shows a demand schedule.  At a price of $3, the total revenues of sellers will be

Accepted Answer

The answer of Answer the question based on the following...

Question 9

Refer to the above graph. If the price increases from P₁ to P₂, then the total revenue will gain area

Accepted Answer

The answer of  Refer to the above graph. If...

Question 10

If the price elasticity of demand for orange juice is 0.8, then a reduction in the price of orange juice will cause buyers to buy

Accepted Answer

Since the price elasticity of demand is less than 1 (inelastic), a reduction in price will lead to a proportionally smaller increase in quantity demanded, causing total revenue (or spending) to decrease.

Question 11

Refer to the above graph. If the price is P₃, then the total revenue is represented by area

Accepted Answer

The answer of  Refer to the above graph. If...

Question 12

Consider the demand curve above. If area 0ABC is smaller than area 0DEF, it suggests that if the price increases from OD to OA, then total revenues of sellers will

Accepted Answer

The answer of  Consider the demand curve above. If...

Question 13

Consider the demand curve above. If area 0ABC is smaller than area 0DEF, we may conclude that demand in this range is

Accepted Answer

The answer of  Consider the demand curve above. If...

Question 14

The price-elasticity coefficients are 2.6, 0.5, 1.4, and 0.18 for four different demand schedules,D₁, D₂, D₃, and D₄, respectively. A 2-percent increase in price will result in an increase in total revenues in which of the following cases?

Accepted Answer

For products with inelastic demand (price elasticity coefficient less than 1), an increase in price leads to an increase in total revenue. This applies to D₂ (0.5) and D₄ (0.18).

Question 15

If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price

Accepted Answer

When demand is inelastic, a price increase leads to a smaller percentage decrease in quantity demanded, thus increasing total revenue. Over the long run, as demand becomes elastic, a price increase causes a larger percentage decrease in quantity demanded, reducing total revenue.

Question 16

If 100 shirts are sold when the unit price is $10, while 75 shirts are sold when the unit price is $15, one can conclude that in this price range,

Accepted Answer

The answer of If 100 shirts are sold when the...

Question 17

Answer the question based on the following table, which shows a demand schedule.  The largest decline in total revenue will occur when price falls from

Accepted Answer

The answer of Answer the question based on the following...

Question 18

Refer to the above graph. If the price decreases from P₃ to P₂, then the total revenue will lose area

Accepted Answer

The answer of  Refer to the above graph. If...

Question 19

When the price of movie tickets in a certain town was reduced, the movie theaters' revenues did not change. This suggests that the demand for movie tickets in that town has a price-elasticity coefficient of

Accepted Answer

When the price of movie tickets was reduced and the movie theaters' revenues did not change, it indicates that the percentage decrease in price was exactly offset by a percentage increase in quantity demanded, which is characteristic of a price-elasticity coefficient of 1.0 (unit elastic demand).

Question 20

Chuck has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer?

Accepted Answer

Since the price elasticity of demand for beer is greater than 1 (elastic demand), a 10 percent increase in price will lead to a more than proportional decrease in quantity demanded, resulting in a decrease in total expenditure on beer.

Quiz 6: Elasticity

Demand is said to be inelastic when

Answer the question based on the following table, which shows a demand schedule. Total revenues will decrease if price

Assume that pizza and hamburgers are the only food items available to consumers. If the price of pizza increases, other factors constant, then which of the following will definitely happen?

Refer to the table above. If the price starts falling from $5, at what price range does demand first become inelastic?

In which of the following instances will total revenues decline?

Refer to the table above. What is the price that yields the maximum total revenue?

Consider the demand curve above. If the price is OA, then the total revenues of sellers would be the area

Answer the question based on the following table, which shows a demand schedule. At a price of $3, the total revenues of sellers will be

Refer to the above graph. If the price increases from P₁ to P₂, then the total revenue will gain area

If the price elasticity of demand for orange juice is 0.8, then a reduction in the price of orange juice will cause buyers to buy

Refer to the above graph. If the price is P₃, then the total revenue is represented by area

Consider the demand curve above. If area 0ABC is smaller than area 0DEF, it suggests that if the price increases from OD to OA, then total revenues of sellers will

Consider the demand curve above. If area 0ABC is smaller than area 0DEF, we may conclude that demand in this range is

The price-elasticity coefficients are 2.6, 0.5, 1.4, and 0.18 for four different demand schedules,D₁, D₂, D₃, and D₄, respectively. A 2-percent increase in price will result in an increase in total revenues in which of the following cases?

If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price

If 100 shirts are sold when the unit price is $10, while 75 shirts are sold when the unit price is $15, one can conclude that in this price range,

Answer the question based on the following table, which shows a demand schedule. The largest decline in total revenue will occur when price falls from

Refer to the above graph. If the price decreases from P₃ to P₂, then the total revenue will lose area

When the price of movie tickets in a certain town was reduced, the movie theaters' revenues did not change. This suggests that the demand for movie tickets in that town has a price-elasticity coefficient of

Chuck has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer?