What is theeffect on total revenueif demand is inelasticandprice rises? (Hint - draw the situation and make the price higher via a change in supply)

Select one:

a.

Total revenue will fall.

b.

Total revenue will rise.

c.

Total revenue may rise or fall depending on the size of the price increase.

d.

Elasticity is not relevant, since total revenue always rises if price increases.

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What is price elasticity of demand?

Select one:

a.

The responsiveness of price to a change in the quantity demanded.

b.

The responsiveness of quantity demanded to a change in price.

c.

Price divided by quantity demanded.

d.

Price multiplied by quantity demanded.

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When is thepercentage change in quantityexactly equalto thepercentage change in price?

Select one:

a.

When there is unitary elasticity.

b.

When demand is inelastic.

c.

When demand is elastic.

d.

When demand does not change.

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What will happen to the quantity demandedif theprice elasticity of demand is - 2.0andpriceincreasesby 10%?

Select one:

a.

It increases by 10%.

b.

It decreases by 5%.

c.

It decreases by 20%.

d.

It increases by 20%.

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Suppose that products A, B, C and D have price elasticity of demand coefficients of - 0.67, - 1.24, - 2.01 and - 0.2 respectively.

A10% rise in pricewouldresult in increased total revenuewith which products?

Select one:

a.

A and B

b.

A and C.

c.

A and D.

d.

B and C.