1) in case of a decrease in product prices: A. The quantity effect always domina

Question

1) in case of a decrease in product prices: A. The quantity effect always dominates the price effect B. The price effect always dominates the quantity effect C. When the price effect dominates the quantity effect, total revenue increases D. When the quantity effect dominates the price effect, total revenue increases 2) in case of an increase in product prices: A the quantity effect always dominates the price effect B the price effect always dominates quantity effect C when the quantity effect dominates the price effect, total revenue is rising D when the quantity effect dominates the price effect, total revenue is falling 3) in the case of an increase in product prices: A the price effect is always zero B the quantity effect is always zero C when the price effect dominates the quantity effect, total revenue is rising D when the price effect dominates the quantity effect, total revenue is falling 1) in case of a decrease in product prices: A. The quantity effect always dominates the price effect B. The price effect always dominates the quantity effect C. When the price effect dominates the quantity effect, total revenue increases D. When the quantity effect dominates the price effect, total revenue increases 2) in case of an increase in product prices: A the quantity effect always dominates the price effect B the price effect always dominates quantity effect C when the quantity effect dominates the price effect, total revenue is rising D when the quantity effect dominates the price effect, total revenue is falling 3) in the case of an increase in product prices: A the price effect is always zero B the quantity effect is always zero C when the price effect dominates the quantity effect, total revenue is rising D when the price effect dominates the quantity effect, total revenue is falling A. The quantity effect always dominates the price effect B. The price effect always dominates the quantity effect C. When the price effect dominates the quantity effect, total revenue increases D. When the quantity effect dominates the price effect, total revenue increases 2) in case of an increase in product prices: A the quantity effect always dominates the price effect B the price effect always dominates quantity effect C when the quantity effect dominates the price effect, total revenue is rising D when the quantity effect dominates the price effect, total revenue is falling 3) in the case of an increase in product prices: A the price effect is always zero B the quantity effect is always zero C when the price effect dominates the quantity effect, total revenue is rising D when the price effect dominates the quantity effect, total revenue is falling

Explanation / Answer

1> D. When the quantity effect dominates the price effect, total revenue increases

Reason

A price effect: After a price increase, each unit sold sells at a higher price, which tends to raise revenue. A quantity effect: After a price increase, fewer units are sold, which tends to lower revenue.

2> D when the quantity effect dominates the price effect, total revenue is falling

Reason

A price effect: After a price increase, each unit sold sells at a higher price, which tends to raise revenue. A quantity effect: After a price increase, fewer units are sold, which tends to lower revenue.

3> C when the price effect dominates the quantity effect, total revenue is rising

Reason

A price effect: After a price increase, each unit sold sells at a higher price, which tends to raise revenue. A quantity effect: After a price increase, fewer units are sold, which tends to lower revenue.

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