CA Foundation Exam > CA Foundation Questions > An increase in price will result in an increa...
Start Learning for Free
An increase in price will result in an increase in total revenue if :
- a)the percentage change in quantity demanded is less than the percentage change in price.
- b)the percentage change in quantity demanded is greater than the percentage change in price.
- c)demand is elastic.
- d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
An increase in price will result in an increase in total revenue if :a...
Explanation:
When the price of a product increases, the total revenue generated by the seller may increase or decrease depending on the responsiveness of the quantity demanded to the price change. In other words, it depends on the elasticity of demand.
Elasticity of demand is the degree of responsiveness of quantity demanded to a change in price. If a small change in price results in a large change in quantity demanded, then demand is said to be elastic. If a change in price results in a small change in quantity demanded, then demand is said to be inelastic.
In this case, an increase in price will result in an increase in total revenue if the percentage change in quantity demanded is less than the percentage change in price. This means that demand is inelastic, and the increase in price does not significantly reduce the quantity demanded. As a result, the seller can increase the price and still generate more revenue.
For example, if the price of a medicine is increased by 10%, and the quantity demanded decreases by only 2%, then demand is inelastic and the total revenue generated by the seller will increase.
Hence, option A is the correct answer.
When the price of a product increases, the total revenue generated by the seller may increase or decrease depending on the responsiveness of the quantity demanded to the price change. In other words, it depends on the elasticity of demand.
Elasticity of demand is the degree of responsiveness of quantity demanded to a change in price. If a small change in price results in a large change in quantity demanded, then demand is said to be elastic. If a change in price results in a small change in quantity demanded, then demand is said to be inelastic.
In this case, an increase in price will result in an increase in total revenue if the percentage change in quantity demanded is less than the percentage change in price. This means that demand is inelastic, and the increase in price does not significantly reduce the quantity demanded. As a result, the seller can increase the price and still generate more revenue.
For example, if the price of a medicine is increased by 10%, and the quantity demanded decreases by only 2%, then demand is inelastic and the total revenue generated by the seller will increase.
Hence, option A is the correct answer.
Free Test
FREE
| Start Free Test |
Community Answer
An increase in price will result in an increase in total revenue if :a...
An increase in price will result in increase in total revenue when the demand is inelastic. When the demand is inelastic, the percentage change in quantity demanded is less than the percentage change in price
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer?
Question Description
An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer?.
An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer?.
Solutions for An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice An increase in price will result in an increase in total revenue if :a)the percentage change in quantity demanded is less than the percentage change in price.b)the percentage change in quantity demanded is greater than the percentage change in price.c)demand is elastic.d)the consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup