Exhibit 5-2 Based on the information in Exhibit 5-2, the demand for the good is __________ and an increase in price from $40 to $60 per unit will __________ total revenue.
A)unit elastic; increase
B)elastic; decrease
C)unit elastic; not change
D)inelastic; increase

Question

Exhibit 5-2  Based on the information in Exhibit 5-2, the demand for the good is __________ and an increase in price from $40 to $60 per unit will __________ total revenue.
A)unit elastic; increase 
B)elastic; decrease 
C)unit elastic; not change 
D)inelastic; increase

Quizplus · Accepted Answer

The slope of the demand curve is greater than one, indicating that the demand is elastic. An increase in price from $40 to $60 per unit will decrease total revenue, as the decrease in quantity demanded will not be offset by the increase in price.

Exhibit 5-2 Based on the Information in Exhibit 5-2