Refer to the information provided in Figure 5.4 below to answer the question(s) that follow. Figure 5.4
-Refer to Figure 5.4. The demand for milkshakes is unit elastic at Point C. If the milkshake price falls from P₁ to P₂, total revenue will

Question

Refer to the information provided in Figure 5.4 below to answer the question(s) that follow.

Figure 5.4
-Refer to Figure 5.4. The demand for milkshakes is unit elastic at Point C. If the milkshake price falls from P₁ to P₂, total revenue will

Quizplus · Accepted Answer

At Point C, the demand for milkshakes is unit elastic. This means that a 1% decrease in price will lead to a 1% increase in quantity demanded. Therefore, if the milkshake price falls from P1 to P2, the quantity demanded will increase. Since total revenue is equal to price times quantity, total revenue will increase.

Refer to the Information Provided in Figure 5