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How the following changes in price affect the total revenue? Would total revenue increase, decrease or remain unchanged? Draw a graph by considering some examples from your daily life for each case and give an explanation in your own words. 

A. Price falls, and demand is inelastic. 

B. Price rises, and demand is elastic.

C. Price rises, and demand is inelastic. 

D. Price falls, and demand is elastic.

E. Price falls, and demand is unit elastic.

 

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Related questions

a. When demand is inelastic, an increase in price causes quantity demanded to ____ and TR to ____.

b. When demand is elastic, a decrease in price causes quantity demanded to ____ and TR to ____.

c. When demand is unitary elastic, an increase in price causes quantity demanded to ___ and TR to ____.

d. If the price falls and total revenue stays the same, demand must be _____.

e. If price rises and total revenue falls, demand must be _____.

Calculate the exact elasticity of demand in the following examples: Then tell if, in each case, demand is elastic, inelastic, or unitary elastic.

(a) When the price of a deluxe car wash rises from $10.00 to $11.00, the number of daily customers falls from 60 to 48.

(b) A dentist with 80 patients cuts his fee for cleaning from $60.00 to $54.00 and attracts two new patients.

1. The concept of price elasticity of demand measures:

a. the slope of the demand curve.

b. the number of buyers in a market.

c. the extent to which the demand curve shifts as the result of a price decline.

d. the sensitiveness of quantities demanded to price changes.

2. When the percentage change in price is less than the resulting percentage change in quantity demanded:

a. demand is elastic.

b. demand is inelastic.

c. demand is unit elastic.

d. none of the above.

3. The elasticity of demand:

a. will be the same at each price-quantity combination on a stable demand curve.

b. tends to be elastic in high-price ranges and inelastic in low-price ranges.

c. tends to be inelastic in high-price ranges and elastic in low-price ranges.

d. is infinitely large for a perfectly inelastic demand curve.

4. Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 121. It can be concluded that the price elasticity of demand is: _______.

5. Total revenue rises as the price of a good increases if price elasticity of demand is:

a. unitary elastic

b. perfectly inelastic.

6. The demand for such products as salt, bread, and electricity tend to be:

a. relatively price elastic.

b. relatively price inelastic.

c. of unit price elasticity.

d. perfectly price elastic.

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