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Figure: The Linear Demand Curve
-(Figure: The Linear Demand Curve)Use Figure: The Linear Demand Curve.Suppose that this is the demand curve for scarves in your scarf shop.If you increase the price of your scarves from $7 to $8,your total revenue will _____,and you notice that your price elasticity of demand is _____.
A) increase;elastic
B) decrease;elastic
C) increase;inelastic
D) decrease;inelastic

Question

Use the following to answer questions :
Figure: The Linear Demand Curve 
-(Figure: The Linear Demand Curve)Use Figure: The Linear Demand Curve.Suppose that this is the demand curve for scarves in your scarf shop.If you increase the price of your scarves from $7 to $8,your total revenue will _____,and you notice that your price elasticity of demand is _____.
A) increase;elastic 
B) decrease;elastic 
C) increase;inelastic 
D) decrease;inelastic

Quizplus · Accepted Answer

When the price elasticity of demand is inelastic, an increase in price leads to an increase in total revenue because the percentage change in quantity demanded is less than the percentage change in price.

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