Figure 4.2
-In Figure 4.2 at quantities smaller than Q1:
A)total revenue is falling.
B)price elasticity is greater than 1.
C)price and total revenue are directly related.
D)all of the above

Question

Figure 4.2
-In Figure 4.2 at quantities smaller than Q1:
A)total revenue is falling. 
B)price elasticity is greater than 1. 
C)price and total revenue are directly related. 
D)all of the above

Quizplus · Accepted Answer

At quantities smaller than Q1, the price elasticity of demand is greater than 1, meaning demand is elastic, and a decrease in price would increase total revenue.

Figure 4.2 -In Figure 4.2 at Quantities Smaller Than Q1