If the price of a good rises, then total revenue will decrease if the demand is a. inelastic; quantity effect will outweigh the price effect b. elastic; price effect will outweigh the quantity effect c. inelastic; price effect will outweigh the quantity effect d. elastic; quantity effect will outweigh the price effect because the

If the price of a good rises, then total revenue will decrease if the demand is a. inelastic; quantity effect will outweigh the price effect b. elastic; price effect will outweigh the quantity effect c. inelastic; price effect will outweigh the quantity effect d. elastic; quantity effect will outweigh the price effect because the

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 2SQ

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Similar questions

Charles loves Mello Yello and will spend 10 per week on the product no matter what the price. What is his price elasticity of demand for Mello Yello?
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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?