The price-elasticity coefficients are 2.6, 0.5, 1.4, and 0.18 for four different demand schedules,D1, D2, D3, and D4, respectively.A 2-percent increase in price will result in an increase in total revenues in which of the following cases?
A)D1 and D3
B)D1 and D4
C)D2 and D4
D)D1, D2, and D3

Question

Quizplus · Accepted Answer

A 2-percent increase in price will increase total revenue if the demand is inelastic (elasticity < 1). D2 (0.5) and D4 (0.18) are inelastic.

The Price-Elasticity Coefficients Are 2