Figure 5-6

-Refer to Figure 5-6.Suppose this demand curve is a straight,downward-sloping line all the way from the horizontal intercept to the vertical intercept.We choose two prices,P₁ and P₂,and the corresponding quantities demanded,Q₁ and Q₂,for the purpose of calculating the price elasticity of demand.Also suppose P₂ > P₁.In which of the following cases could we possibly find that (i) demand is elastic and (ii) an increase in price from P₁ to P₂ causes an increase in total revenue?

Question

Figure 5-6

-Refer to Figure 5-6.Suppose this demand curve is a straight,downward-sloping line all the way from the horizontal intercept to the vertical intercept.We choose two prices,P₁ and P₂,and the corresponding quantities demanded,Q₁ and Q₂,for the purpose of calculating the price elasticity of demand.Also suppose P₂ > P₁.In which of the following cases could we possibly find that (i) demand is elastic and (ii) an increase in price from P₁ to P₂ causes an increase in total revenue?

Quizplus · Accepted Answer

The Answer of Figure 5-6 -Refer to Figure 5-6.Suppose this demand curve is a straight,downward-sloping line all the way from the horizontal intercept to the vertical intercept.We choose two prices,P₁ and P₂,and the corresponding quantities demanded,Q₁ and Q₂,for the purpose of calculating the price elasticity of demand.Also suppose P₂ > P₁.In which of the following cases could we possibly find that (i)demand is elastic and (ii)an increase in price from P₁ to P₂ causes an increase in total revenue? A)0 < P₁ < P₂ < $10. B)$10 < P₁ < P₂ < $15. C)P₁ > $15. D)None of the above is correct.

Figure 5-6 -Refer to Figure 5-6.Suppose This Demand Curve Is a Straight,downward-Sloping