When the price of chocolate-covered peanuts increases from $1.55 to $2.00,the quantity demanded decreases from 220 to 160.In this price range,the demand for chocolate-covered peanuts is _____,and total revenue will _____ when the price increases.
A)elastic;increase
B)elastic;decrease
C)inelastic;increase
D)inelastic;decrease

Question

Quizplus · Accepted Answer

Since the quantity demanded decreased significantly when the price increased, the demand for chocolate-covered peanuts is considered elastic. When the price increases, total revenue will decrease because the decrease in quantity demanded outweighs the increase in price.

When the Price of Chocolate-Covered Peanuts Increases from $1