Economics (AS & A Level) · May / June 2021 · Paper 12 · Question 6
9708Price elasticity, income elasticity and cross elasticity of demand
The price elasticity of demand for a firm's product is equal to one for all price changes. What would be the result of this?
- AA percentage increase in price will cause demand to fall by a larger percentage.
- BA percentage increase in price will cause demand to increase by the same percentage.
- CQuantity demanded will always be the same whatever the price.
- DThe firm's revenue will always be the same whatever the price.
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Correct answer: D. The firm's revenue will always be the same whatever the price.
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