question archive If price elasticity equals one in absolute terms, it means: options: A) The percentage change in quantity is always one percent for any percentage change in price
If price elasticity equals one in absolute terms, it means: options: A) The percentage change in quantity is always one percent for any percentage change in price
Subject:EconomicsPrice:2.88 Bought3
If price elasticity equals one in absolute terms, it means:
options:
A) The percentage change in quantity is always one percent for any percentage change in price.
B) Total Revenue will stay the same even if price increases or decreases
C) Total Revenue will increase in the same proportion as the increase in price.
D) Total Revenue will always increase in one percent if price changes in any amount.
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The best answer among the choices is Letter C.
Total revenue will increase in the same proportion as the increase in price. Selling price multiplied by the quantity sold is equal to the revenue. So if the price increases, the total revenue will increase in the same proportion.
