Which of the following describes a situation in which demand must be elastic?
A) Total revenue increases by 15 percent when the price of corn dogs rises by 15 percent.
B) Total revenue increases by less than 15 percent when the price of corn dogs rises by 15 percent.
C) Total revenue decreases by more than 15 percent when the price of corn dogs rises by 15 percent.
D) Total revenue increases by $15 when the price of corn dogs rises by $15.

Question

Quizplus · Accepted Answer

When total revenue decreases by more than the percentage increase in price, it indicates a situation in which demand is elastic. This means that consumers are sensitive to changes in price and will significantly decrease their quantity demanded in response to a price increase.

Which of the Following Describes a Situation in Which Demand