The total revenue from the sale of a good or service is calculated by multiplying the price paid by the number of units sold.
74) If an increase in price causes total revenue to decrease, we can conclude that demand is price elastic.
75) Assuming demand is inelastic, if a firm wants to increase its total revenue, it should raise price.
76) When demand is unit elastic, an increase in price will cause total revenue to increase, stay the same, or decrease, depending on the corresponding change in quantity demanded.
77) When the percentage change in price is greater than the corresponding change in quantity demanded, demand is inelastic.
78) Assume that when the price of good X is $7, quantity demanded is 25. When price is increased to $9, quantity demanded falls to 20. Based on this information, over the range in question demand is elastic.
79) Assume that when the price of good X is $12, quantity demanded is 32. When price is decreased to $9, quantity demanded increases to 45. Based on this information, over the range in question demand is elastic.
80) As the number of available substitutes for a good increases, the price elasticity of demand for the good will increase as well.
81) Consider the market for gasoline in a moderately large city. All else constant, it would be reasonable to conclude that the price elasticity demand for any individual gas station would be higher (more elastic) than the price elasticity of demand for gas in general.
82) As the amount of time a consumer has to adjust to a change in price increases, so does the price elasticity of demand for a good.
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