-If demand for a good is represented by curve D" in Figure 5-10,then an increase in supply of the good will cause the equilibrium
A)price to fall,but revenue will not change
B)quantity to fall,but revenue to rise
C)quantity to rise,but revenue will not change
D)price to rise,but revenue to fall
E)price to fall.Seller's total revenue could rise or fall depending on the price elasticity of demand

Question

-If demand for a good is represented by curve D" in Figure 5-10,then an increase in supply of the good will cause the equilibrium
A)price to fall,but revenue will not change 
B)quantity to fall,but revenue to rise 
C)quantity to rise,but revenue will not change 
D)price to rise,but revenue to fall 
E)price to fall.Seller's total revenue could rise or fall depending on the price elasticity of demand

Quizplus · Accepted Answer

An increase in supply will cause the price to fall. The effect on total revenue depends on the price elasticity of demand; if demand is elastic, total revenue will rise, and if inelastic, total revenue will fall.

-If Demand for a Good Is Represented by Curve D