GK
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
1.A decrease in total revenue
|
|
|
2.An increase in total revenue
|
|
|
3.No change in total revenue
|
|
|
4.A decrease in quantity demanded
|
Detailed explanation-1: -When the price elasticity of demand for a good is perfectly inelastic, changes in the price do not affect the quantity demanded the good; raising prices will always cause total revenue to increase.
Detailed explanation-2: -More Overall Revenue On the other hand, if the price for an inelastic good is increased and the demand does not change, the total revenue increases due to the higher price and static quantity demanded. However, price increases typically do lead to a small decrease in quantity demanded.
Detailed explanation-3: -0% Since demand in inelastic, the change in price by 2% will not lead to change in demand.
Detailed explanation-4: -An increase in price result in an increase in total revenue(total expenditure), indicates direct relation so demand will be inelastic (E<1).
Detailed explanation-5: -Inelastic demand means that when the price of a good or service goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.