Exhibit 5-6
-We can tell that demand is elastic as price falls between point a and point b in Exhibit 5-6 because
A) quantity demanded is increasing
B) total revenue is increasing
C) total revenue is decreasing
D) total revenue is unchanged
E) the demand curve slopes downward

Question

Exhibit 5-6 
-We can tell that demand is elastic as price falls between point a and point b in Exhibit 5-6 because
A) quantity demanded is increasing 
B) total revenue is increasing 
C) total revenue is decreasing 
D) total revenue is unchanged 
E) the demand curve slopes downward

Quizplus · Accepted Answer

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

Exhibit 5-6 -We Can Tell That Demand Is Elastic as Price Falls