Table of contents

1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

4. Elasticity

Elasticity Summary

Macroeconomics

4. Elasticity

Elasticity Summary

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Multiple Choice

An increase in the supply of a good will increase the total revenue producers receive if:

The demand curve is inelastic

The demand curve is elastic

The supply curve is inelastic

The supply curve is elastic

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Verified step by step guidance

Understand the relationship between elasticity and total revenue: When demand is elastic, a decrease in price leads to a proportionally larger increase in quantity demanded, thus increasing total revenue.

Identify the condition given in the problem: The problem states that an increase in supply will increase total revenue.

Recall the law of supply and demand: An increase in supply typically leads to a decrease in price, assuming demand remains constant.

Apply the concept of elasticity: If the demand curve is elastic, the percentage increase in quantity demanded will be greater than the percentage decrease in price, leading to an increase in total revenue.

Conclude that for total revenue to increase with an increase in supply, the demand curve must be elastic, as this ensures that the increase in quantity sold outweighs the decrease in price.