Elastic demand exists when:
A)a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
B)a small percentage decrease in price produces a smaller percentage increase in quantity demanded and total revenue falls.
C)the quantity demanded remains the same regardless of level of price and total revenue is unchanged.
D)an increase in price causes a larger increase in quantity demanded and total revenue falls to zero.

Question

Quizplus · Accepted Answer

Elastic demand exists when a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases. This means that customers are sensitive to price changes and will buy more of a product when the price drops, resulting in an overall increase in revenue for the seller.

Elastic Demand Exists When