Quiz 3.9

Suppose when Nablom's Bakery raised the price of its breads by 10 percent, the quantity demanded fell by 15 percent. What was the effect on sales revenue?

Sales revenue decreased.

Suppose the absolute value of the price elasticity of demand for basketball game tickets on your campus is greater than 1. Increasing ticket prices will increase total revenue from sales

False

When Audrina raised the price of her homemade cookies, her total revenue increased. This suggests that the demand for Audrina's cookies is elastic.

False

Which of the following statements is true?

If the price of a good is raised and total revenue increases, demand is inelastic

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, demand for using the toll road must be

inelastic

Opera Estate Girls' School is considering increasing its tuition to raise revenue. If the school believes that raising tuition will increase revenue it is assuming that the demand for attending the school is

inelastic

Total revenue equals

price per unit times quantity sold

If a firm raised its price and discovered that its total revenue fell, then the demand for its product is

relatively elastic

If the demand for a product is perfectly inelastic, a decrease in the price of the product

will decrease total revenue