Figure 5-11
-Refer to Figure 5-11.When price falls from $50 to $40,it can be inferred that demand between those two prices is
A) inelastic,since total revenue decreases from $8,000 to $5,000.
B) inelastic,since total revenue increases from $5,000 to $8,000.
C) elastic,since total revenue increases from $5,000 to $8,000.
D) unit elastic,since total revenue does not change.

Question

Figure 5-11 
-Refer to Figure 5-11.When price falls from $50 to $40,it can be inferred that demand between those two prices is
A) inelastic,since total revenue decreases from $8,000 to $5,000. 
B) inelastic,since total revenue increases from $5,000 to $8,000. 
C) elastic,since total revenue increases from $5,000 to $8,000. 
D) unit elastic,since total revenue does not change.

Quizplus · Accepted Answer

When the price falls from $50 to $40, the quantity demanded increases from 100 to 125. This indicates that consumers are relatively responsive to the change in price, making demand elastic. As a result, when price decreases, the total revenue increases from $5,000 to $8,000. This confirms that the demand is elastic as the percentage change in quantity demanded is greater than the percentage change in price.

Figure 5-11 -Refer to Figure 5-11.When Price Falls from $50 to $40,it