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A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ?
Most Upvoted Answer
A decrease in price will result in an increase in total revenue if : (...
Explanation:
When there is a decrease in price, it can have two possible effects on total revenue: it can either increase or decrease it. The direction of the effect depends on the responsiveness of quantity demanded to the change in price, which is measured by the price elasticity of demand. If demand is elastic, a decrease in price will result in a proportionately larger increase in quantity demanded, leading to an increase in total revenue. If demand is inelastic, a decrease in price will result in a proportionately smaller increase in quantity demanded, leading to a decrease in total revenue.
Therefore, the correct answer to the given question is (b) the percentage change in quantity demanded is greater than the percentage change in price. This means that the elasticity of demand is greater than 1, indicating that demand is elastic. In this case, a decrease in price will result in a larger increase in quantity demanded, leading to a higher total revenue.
To summarize:
- Total revenue = Price x Quantity demanded
- The effect of a price change on total revenue depends on the price elasticity of demand.
- If demand is elastic (E > 1), a decrease in price will result in an increase in total revenue.
- If demand is inelastic (E < 1),="" a="" decrease="" in="" price="" will="" result="" in="" a="" decrease="" in="" total="" />
- If demand is unit elastic (E = 1), a change in price will not affect total revenue.
When there is a decrease in price, it can have two possible effects on total revenue: it can either increase or decrease it. The direction of the effect depends on the responsiveness of quantity demanded to the change in price, which is measured by the price elasticity of demand. If demand is elastic, a decrease in price will result in a proportionately larger increase in quantity demanded, leading to an increase in total revenue. If demand is inelastic, a decrease in price will result in a proportionately smaller increase in quantity demanded, leading to a decrease in total revenue.
Therefore, the correct answer to the given question is (b) the percentage change in quantity demanded is greater than the percentage change in price. This means that the elasticity of demand is greater than 1, indicating that demand is elastic. In this case, a decrease in price will result in a larger increase in quantity demanded, leading to a higher total revenue.
To summarize:
- Total revenue = Price x Quantity demanded
- The effect of a price change on total revenue depends on the price elasticity of demand.
- If demand is elastic (E > 1), a decrease in price will result in an increase in total revenue.
- If demand is inelastic (E < 1),="" a="" decrease="" in="" price="" will="" result="" in="" a="" decrease="" in="" total="" />
- If demand is unit elastic (E = 1), a change in price will not affect total revenue.
Community Answer
A decrease in price will result in an increase in total revenue if : (...
It's answer is (b) because
Total receipts from sales of a given quantity of goods or services. It is the total income of a business and is calculated by multiplying the quantity of goods sold by the price of the goods. For example, if Company A produces 100 widgets and sells them for $50 each, the total revenue would be 100 * $50 = $5,000. In economics, total revenue is often represented in a table or as a curve on a graph.
If the price will decrease than the production will increase. If the production will increase than revenue will increase. So the percentage change in demand is greater than the percentage change in price
Total receipts from sales of a given quantity of goods or services. It is the total income of a business and is calculated by multiplying the quantity of goods sold by the price of the goods. For example, if Company A produces 100 widgets and sells them for $50 each, the total revenue would be 100 * $50 = $5,000. In economics, total revenue is often represented in a table or as a curve on a graph.
If the price will decrease than the production will increase. If the production will increase than revenue will increase. So the percentage change in demand is greater than the percentage change in price
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A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ?
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A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ? 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 A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ?.
A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ? 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 A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ?.
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A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ?, a detailed solution for A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ? has been provided alongside types of A decrease 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 inelastic. (d) the consumer is operating along a linear demand curve at a point at which the price is very low and quantity demanded is very high. Answer is :- (b) can anybody explain ? theory, EduRev gives you an
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