Recall the application regarding the vanity plates in Virginia.Why would an increase in price for vanity plates raise the total revenue that the state of Virginia will receive from vanity plates?
A)The demand for vanity plates in Virginia is inelastic.
B)The demand for vanity plates in Virginia is elastic.
C)The demand for vanity plates in Virginia is equal to 1.
D)There is insufficient information to draw a conclusion.

Question

Quizplus · Accepted Answer

If the demand for vanity plates in Virginia is inelastic, then an increase in price will not significantly decrease the quantity demanded. Therefore, the total revenue received by the state of Virginia from vanity plates will increase due to the increase in price.

Recall the Application Regarding the Vanity Plates in Virginia