-The figure above represents the behaviour of total revenue as price falls along a straight- line demand curve. What is the price elasticity of demand if total revenue is given by point f?
A) Demand is inelastic.
B) Demand is elastic.
C) Demand is unit elastic.
D) It is impossible to determine.

Question

-The figure above represents the behaviour of total revenue as price falls along a straight- line demand curve. What is the price elasticity of demand if total revenue is given by point f?
A) Demand is inelastic. 
B) Demand is elastic. 
C) Demand is unit elastic. 
D) It is impossible to determine.

Quizplus · Accepted Answer

Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price. At point f, the total revenue is falling, which means that the quantity demanded is increasing as the price falls. Therefore, demand is elastic.

-The Figure Above Represents the Behaviour of Total Revenue as Price