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  • Short Structured Questions Category Value Characteristics Explain What Happen To Total Revenue When There Is A Fall in Price

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    The document summarizes how total revenue is affected when price falls for different degrees of price elasticity of demand: - For perfectly inelastic demand, quantity demanded does not change as price falls, so total revenue falls. - For inelastic demand, a price fall leads to a less than proportional increase in quantity demanded, so total revenue falls. - For unitary elastic demand, a price fall leads to a proportional increase in quantity demanded, so total revenue remains the same. - For elastic demand, a price fall leads to a more than proportional increase in quantity demanded, so total revenue rises. - For perfectly elastic demand, demand is infinite at the given price so quantity and total revenue do

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    Short Question 1

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    The document summarizes how total revenue is affected when price falls for different degrees of price elasticity of demand: - For perfectly inelastic demand, quantity demanded does not change as price falls, so total revenue falls. - For inelastic demand, a price fall leads to a less than proportional increase in quantity demanded, so total revenue falls. - For unitary elastic demand, a price fall leads to a proportional increase in quantity demanded, so total revenue remains the same. - For elastic demand, a price fall leads to a more than proportional increase in quantity demanded, so total revenue rises. - For perfectly elastic demand, demand is infinite at the given price so quantity and total revenue do

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    © All Rights Reserved
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    12 views2 pages

    Short Structured Questions Category Value Characteristics Explain What Happen To Total Revenue When There Is A Fall in Price

    Uploaded by

    davidboh
    The document summarizes how total revenue is affected when price falls for different degrees of price elasticity of demand: - For perfectly inelastic demand, quantity demanded does not change as price falls, so total revenue falls. - For inelastic demand, a price fall leads to a less than proportional increase in quantity demanded, so total revenue falls. - For unitary elastic demand, a price fall leads to a proportional increase in quantity demanded, so total revenue remains the same. - For elastic demand, a price fall leads to a more than proportional increase in quantity demanded, so total revenue rises. - For perfectly elastic demand, demand is infinite at the given price so quantity and total revenue do

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    © All Rights Reserved
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    H1 JC1 Economics_2013 Promotional Examination Revision Package ANSWERS

    SHORT STRUCTURED QUESTIONS


    Question 1
    Category Value Characteristics Explain what happen to total
    revenue when there is a fall in
    price
    Perfectly inelastic Ed = 0 Quantity demanded remains constant as
    price changes.
    (Fill in the blanks)
    Total revenue = Price X Quantity
    A fall in price brings about no
    change in quantity demanded and
    total revenue falls.
    Inelastic Ed<1 A given fall in price leads to a less than
    proportionate increase in quantity
    demanded
    (Fill in the blanks)
    Total revenue = Price X Quantity
    A fall in price brings about a less
    than proportionate increase in
    quantity reduction in total
    revenue due to the fall in price is
    more than the addition to the total
    revenue due to the increase in
    quantity TR falls.
    Unitary Ed=1 (Fill in the blanks)
    A given fall in price lead to a
    proportionate increase in quantity
    demanded.
    (Fill in the blanks)
    Total revenue = Price X Quantity
    A fall in price brings about a
    proportionate increase in quantity
    reduction in total revenue due
    to the fall in price is equals to the
    addition to the total revenue due to
    the increase in quantity TR
    remains constant.
    Elastic Ed >1

    (Fill in the blanks)

    A given fall in price lead to a more than
    proportionate increase in quantity
    demanded.
    (Fill in the blanks)
    Total revenue = Price X Quantity
    A fall in price brings about a less
    than proportionate increase in
    quantity reduction in total
    revenue due to the fall in price is
    more than the addition to the total
    revenue due to the increase in
    H1 JC1 Economics_2013 Promotional Examination Revision Package ANSWERS



    quantity TR falls.
    Perfectly elastic Ed=

    An infinite amount will be bought at
    certain price or below but none at a
    higher price.
    (Fill in the blanks)
    No change in TR

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