7th December 2019

quizlet
12

How is the future price related to the current demand?

If the price is expected to drop, current demand will fall. If the price is expected to rise, current demand will fall. Current demand is not related to future price. If the price is expected to drop, current demand will fall.

Also asked, how does an increase in price affect total revenue?

In economics, the total revenue test is a means for determining whether demand is elastic or inelastic. If an increase in price causes an increase in total revenue, then demand can be said to be inelastic, since the increase in price does not have a large impact on quantity demanded.

How do changes in price affect demand?

The four basic laws of supply and demand are: If demand increases and supply remains unchanged, then it leads to higher equilibrium price and higher quantity. If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and lower quantity.

Is milk an inelastic good?

If they reduce their quantity demand, this drop in QD is proportionally smaller than the price increase. Therefore milk is inelastic. Addictive goods are inelastic and milk is not an addictive good, so demand for milk is elastic.
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