True or false: ceteris paribus, an increase in price will most likely decrease total revenue if the price elasticity of demand is 1.8?

Question:

Price Elasticity of Demand:

Price elasticity of demand measures the sensitivity of quantity demanded with respect to price changes. If the elasticity is greater than one, the demand is elastic and if it is less than 1, the demand is inelastic.

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Price Elasticity of Demand in Microeconomics

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Chapter 2 / Lesson 11

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In microeconomics, the principle of price elasticity of demand is important to understand. Learn the definition of price elasticity of demand, understand the formula and its categories, and see some calculation examples.

Related to this Question

If the price elasticity of demand is exactly 1, then a decrease in the price will result in an increase in total revenue. True or False.
True or false? If a good has a price elasticity of demand of 0.65, an increase in price would increase revenue.
If the price elasticity of demand for a firm's output is inelastic, then the firm could increase its revenue by reducing price. True False
TRUE OR FALSE If demand for a product is price elastic and the price increases, total revenue will decrease. If demand for a product is price inelastic and the price decreases, total revenue will
True or false? If the elasticity of demand is less than one, then raising the price will always increase profits.
True or false? When the total revenue is maximized, the price elasticity of demand is equal to 1.
Suppose the price elasticity of demand is 0.2, an increase in price will cause total revenue to fall. A. true B. false
If a 10% increase in price decreases the quantity demanded by 12%, the price elasticity of demand is 1.2. A) True B) False
True or false? All else constant, there is an inverse relationship between the price elasticity of demand and the marginal revenue resulting from a decrease in price.
As the price of a product falls, the demand for the product increases, ceteris paribus. A) True B) False
State true or false and justify your answer: If demand is inelastic and price decreases, total revenue will also decrease.
Answer true or false: If a 10 percent change in price leads to a 20 percent change in quantity demanded, then the price elasticity of demand would be equal to two.
True or false? When demand is inelastic, a decrease in price increases total revenue for the firm.
True or false? If demand is relatively elastic at the current price, then a decrease in price will result in an increase in total revenue.
True or false? Elasticity of demand is the degree to which demand increases in response to a price decrease or decreases in response to a price increase.
Assume the price elasticity of demand for a good is -3. In this case, a decrease in price would result in marginal revenue of (2/3)P. a. True b. False
An increase in price will cause a firm's total revenue to increase if demand is price elastic. a. True b. False
True or False: In an increasing cost industry, the long-run equilibrium price is unchanged after an increase or decrease in market demand.
True or False: a. The average product and marginal product do not cross each other. b. When the price elasticity of demand is less than 1, price increase increases revenue. c. When the price elasticity of demand is greater than 1, price decrease decrea
True or false? When demand is inelastic, raising the price will increase total revenue.
If a 10% increase in the price of a good causes a 5% reduction in the quantity demanded, then the price elasticity of demand for this well is -1/2. a. True. b. False.
State true or false and justify your answer: If the price elasticity of demand for a good is 3, then total revenue will increase.
True or false? Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices).
State true or false and justify your answer: If the quantity demanded for good A increases from 40 to 60 when the price decreases from $9 to $7, the absolute value of the price elasticity of demand in this price range is 1.6.
If the demand for a good has unitary elasticity, or elasticity is -1, it is always true that an increase in its price will lead to more revenues for sellers taken as a whole. a) true b) false
When the demand curve shifts, the change in equilibrium price will be smaller the closer the price elasticity of supply is to 0. True False
True or false? If demand is inelastic, a drop in price will raise quantity demanded by a higher percentage.
If the price elasticity of demand is 3 then this means that a one-percentage increase in quantity demanded will cause a three-percentage decrease in the price of the good. a. True. b. False.
True or false? If a 3.67% increase in price causes a 1.97% decrease in quantity demanded, then total revenue must fall following an increase in price.
If the price elasticity of demand is 2 then a 4% increase in the price of the product can be expected to reduce the quantity demanded by 8%. a. True. b. False.
True or false? The more inelastic the demand, the closer marginal revenue is to price.
True or false? If demand is perfectly inelastic, then the own-price elasticity of demand is infinite in absolute value.
Answer true or false: If the demand for a product is price inelastic, then a decrease in price would lead to an increase in quantity demanded but a decrease in total expenditure.
True or false? The value of the price elasticity of demand is not equal to the slope of the demand curve.
True or False: Income elasticity of demand for a good is always equal to the price elasticity of demand.
True or false? An increase in supply decreases the equilibrium price. The decrease in price increases demand.
True or False: 1. The revenue function is related to output. 2. When the price elasticity of demand is less than 1, price increase increases revenue. 3. When the price elasticity of demand is great
The price elasticity of demand becomes relatively greater as more substitutes are easily available. (a) true (b) false
True or false? Price cuts in an elastic part of a demand curve generate increases in total revenue.
True or false? A decrease in the price elasticity of demand would follow an increase in monopoly power.
The value of the price elasticity of demand is equal to the slope of the demand curve. True or false?
True or False: If the price elasticity of demand for a product equals 0.5, then consumer responsiveness is small relative to a price change.
The ratio of price to marginal cost for a monopolist increases as the demand curve becomes more elastic. True or False? Explain
Answer true or false: A monopolist's marginal revenue is 0 whenever the price elasticity of demand is -1.
If a firm has own-price elasticity of demand Ep= -0.8, the firm is maximizing profit. True or False?
State true or false and justify your answer: An increase in demand with no change in supply will increase equilibrium price and reduce equilibrium quantity.
True or false? An increase in supply, with no change in demand, will decrease the equilibrium price and the equilibrium quantity.
A decrease in the price elasticity of demand would follow an increase in monopoly power. True or false?
True or false? If demand decreases and supply increases, the equilibrium price will fall and the quantity will rise.
True or false? If the price of a good goes up by 5 percent and the quantity demanded falls by 15 percent, the price elasticity of demand is 1/3.
True or false? If the percentage change in price is 5% and the percentage change in quantity demanded is 2%, then demand is inelastic.
State true or false and justify your answer: When demand is inelastic, an increase in price will lead to an increase in total revenue for the product.
An increase in demand will cause the equilibrium price and quantity to rise. A) True B) False
If the elasticity of supply is 0.5, then a 10% decrease in price will result in a 5% increase in quantity supplied. a. True. b. False.
If the elasticity of demand is 0.5, then a 20% change in price will lead to a 10% change in quantity demanded. A) True B) False
True or false? The income elasticity of demand can never exceed, in absolute terms, two times the price elasticity of demand if the good in question is a superior good.
TRUE OR FALSE: The right demand shift results into an increase in equilibrium price. The price down of necessity goods results in increases of both demand and total revenue. The price down for long
True or false? If demand increases and supply increases, the equilibrium price will rise and the quantity will rise.
True or false? For linear demand, the slope and the elasticity are identical at any given price.
The Law of Supply says that prices are directly related to Quantity Demanded, ceteris paribus. i. True. ii. False.
True or false? If the demand and supply for a product both increase, the equilibrium price of the product must also increase.
If a 3.67 percent increase in price causes a 1.97 percent decrease in quantity demanded, then total revenue must fall following an increase in price. a. True b. False
True or false? An increase in the price level shifts the aggregate demand curve to the left.
Suppose after a 3% decrease in the price of a good, the quantity demanded for the good increases by 2%. This means the price elasticity of demand is 0.67. Is this statement true or false? Explain.
If the current price demand marketed by a firm is elastic, a reduction in price along the demand curve will increase the revenue of the firm. a. True. b. False.
The elasticity of demand equals the ratio of the percentage change in the price of a good to the percentage change in the quantity demanded. (i) True (ii) False
True or false? If the price elasticity of demand is equal to 0, then demand is unit elastic.
An increase in the price level shifts the aggregate demand curve to the left. True False
If the price elasticity of demand equals one, the customers do not respond at all price changes. a. True b. False
An increase in demand causes an increase in the equilibrium price. The increase in equilibrium price will then cause an increase in supply. True or false.
The ratio of a monopolist's optimal price to its marginal cost is larger when the market elasticity of demand is greater in absolute value (i.e., more elastic). a. True. b. False.
If the price elasticity of supply is equal to zero, then supply is perfectly inelastic. a. True. b. False.
Answer true or false: If the demand and the supply of a product both decrease, the equilibrium price will rise.
True or False: A product's price approaches its marginal cost as market concentration increases.
True or False If the demand is price inelastic in a given price range, an increase in the price will result in an increase in the revenue suppliers get.
The price elasticity of demand for the industry is always smaller (in absolute terms) than the price elasticity of demand of firms within that industry. True or False. Explain.
If the demand curve is a linear function of price, then the price elasticity of demand is the same at all prices. a. True. b. False.
True or false: When demand decreases and supply increases, there will be a decrease in the equilibrium price.
State true or false and justify your answer: If the price is greater than the marginal cost, a firm should produce less.
Please sort the statements into whether they are true or false. - When supply is perfectly inelastic, a change in demand has no effect on the price. - When the price increases, total revenue always
True or false? If the cross-price elasticity of demand between goods X and Y is negative, then X and Y are complementary goods.
True or false? An increase in demand shifts the demand curve to the right, increasing the equilibrium price.
True or false? If the quantity sold rises by 1% when the price of a good is cut by 2%, the price elasticity of demand is roughly 2.
Explain the statement as true or false and give explanations. When the total revenue is maximized, the price elasticity of demand is one.
State true or false and justify your answer: Not only do changes in demand induce relatively wide fluctuations in price when supply is inelastic, but changes in supply induce relatively wide fluctuations in price when demand is inelastic.
True or false? A rightward shift in the supply curve, assuming no change in the demand curve, will increase the price and decrease the quantity demanded.
True or false? If a firm is facing a downward sloping demand curve, a price cut will reduce total revenue.
An increase in demand would enable a monopolist to raise its price while reducing its output. A) True B) False
A decrease in the price level causes a lower equilibrium quantity demanded. True False
If marginal cost is increasing, then average variable cost must be increasing simultaneously. True or False?
True or false? If the percentage change in price is 5% and the percentage change in quantity demanded is 20%, then demand is elastic.
State true or false and justify your answer: When demand is unit elastic, an increase in price will lead to increased total revenue for the product.
True or false? If the price elasticity is zero, then any price change will also have zero effect on total revenue.
An increase in the price of one good will decrease the demand for a substitute good. a. true. b. false.
"According to the supply and demand model, all else equal, if the price of one of its substitutes increases, the price of a good will increase." This statement is: a. true. b. false, because whether the price rises or falls depends on whether the good is
State True or False. The short-run aggregate supply curve is upward sloping in part because increases in aggregate demand cause some firms to increase their price markups.
True or false? A monopolistic firm's demand curve is always inelastic.
True or false? Ceteris paribus, the more elastic the supply curve, the larger the total subsidy.
A firm's revenue is price per unit times the quantity sold, so an increase in price decreases revenue if demand is elastic. True or False?

True or false: ceteris paribus, an increase in price will most likely decrease total revenue if ...

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Price Elasticity of Demand:

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