Exhibit 5-7
-Which of the following is true between points g and h in Exhibit 5-7?
A) Total revenue remains constant at $180.
B) Total revenue falls by $12.
C) Total revenue falls by $60.
D) Total revenue falls by $180.
E) Demand is elastic.

Question

Exhibit 5-7 
-Which of the following is true between points g and h in Exhibit 5-7?
A) Total revenue remains constant at $180. 
B) Total revenue falls by $12. 
C) Total revenue falls by $60. 
D) Total revenue falls by $180. 
E) Demand is elastic.

Quizplus · Accepted Answer

The price decreases from $15 to $10, resulting in a decrease in quantity demanded from 12 to 6. The total revenue at point g is $180 ($15 x 12), and the total revenue at point h is $120 ($10 x 6), resulting in a decrease in total revenue by $60. This indicates an elastic demand, as the decrease in price led to a proportionally larger decrease in quantity demanded, resulting in a decrease in total revenue.

Exhibit 5-7 -Which of the Following Is True Between Points G and Points