If a decrease in the price of movie tickets increases the total revenue of movie theaters, this is evidence that demand is:
A) price elastic.
B) price inelastic.
C) unit elastic with respect to price.
D) perfectly inelastic.

Question

Quizplus · Accepted Answer

When a decrease in price leads to an increase in total revenue, it indicates that the demand is price elastic. This means that the percentage increase in quantity demanded is greater than the percentage decrease in price.

If a Decrease in the Price of Movie Tickets Increases