Soru
What is the total revenue test? The total revenue test is a method of estimating the price elasticity of demand by observing the __ that results from __ when all other influences o A. change in the quantity demanded; a change in the price B. change in total revenue; a change in the price C. total revenue; the quantity sold at a given price D. change in the quantity sold; a change in demand
Çözüm
4.7
(192 Oylar)
Nihat
Profesyonel · 6 yıl öğretmeni
Uzman doğrulaması
Cevap
B. change in total revenue; a change in the price
Daha Fazla
## Step 1The total revenue test is a method used to estimate the price elasticity of demand. This test involves observing the change in total revenue that results from a change in price, assuming all other factors influencing demand remain constant.## Step 2If the total revenue increases when the price decreases, the demand is considered inelastic. This is because the percentage change in quantity demanded is less than the percentage change in price.## Step 3Conversely, if the total revenue decreases when the price increases, the demand is considered elastic. This is because the percentage change in quantity demanded is greater than the percentage change in price.## Step 4The total revenue test does not directly consider the change in the quantity demanded or the change in the quantity sold. Instead, it focuses on the change in total revenue due to a change in price.