Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A → B → C → D
B
B → A → D → C
C
A → C → B → D
D
B → D → A → C
Understanding the Answer
Let's break down why this is correct
Answer
To analyze how a price change affects total revenue, you start by identifying the price change and the corresponding quantity demanded. For example, if a product's price decreases from $10 to $8 and the quantity demanded increases from 100 to 150 units, you first note these changes. Next, you determine if the demand for that product is elastic or inelastic, which means figuring out how sensitive consumers are to price changes. After that, you calculate the new total revenue by multiplying the new price by the new quantity demanded. Finally, you analyze how this elasticity affects total revenue, understanding that if demand is elastic, a price decrease will increase total revenue, while an inelastic demand will lead to a decrease in total revenue.
Detailed Explanation
First, you need to identify the price change and how much people want to buy at that new price. Other options are incorrect because This option starts with checking elasticity, but you need to know the price change first; This option jumps to calculating total revenue before understanding demand.
Key Concepts
Total Revenue
Demand Elasticity
Consumer Behavior
Topic
Total Revenue and Demand Elasticity
Difficulty
medium level question
Cognitive Level
understand
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