Exhibit 5-28 Consider Exhibit 5-28.When supply increase from S₁ to S₂, total revenue increases from $275 to $300.This means that demand must be A)perfectly elastic B)elastic C)perfectly inelastic D)inelastic E)unit elastic

Question

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When a supply increase leads to an increase in total revenue, it suggests that demand is elastic. This means that a small change in price leads to a proportionally larger change in quantity demanded.