Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
1)State true or false and justify your answer: If demand is inelastic and price decreases, total revenue will also decrease
1)State true or false and justify your answer:
If demand is inelastic and price decreases, total revenue will also decrease.
2)
State true or false and justify your answer:
Buyers are more responsive to price changes for goods in which they spend a larger percentage of their income.
Expert Solution
1)
The given statement is true.
Explanation:-
In the case of inelastic demand, the price and total revenue move in the same direction. It means total revenue rises with a rise in price for a product, and total revenue falls with a fall in the price for a product. It means inelastic demand has an elasticity of less than one. It means demand is lesser than the price of a product.
2)
The given statement is true.
The demand for the goods which is purchased by spending a small portion of the income of consumers will not decrease according to the increase in price whereas there will be a high elasticity of demand for the product which requires the major portion of consumers income.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
