If the total revenue received by sellers of DVDs increases by 20 per cent when price increases by 10 per cent, then demand for DVDs is
A) inelastic.
B) elastic.
C) unit elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

The demand for DVDs is inelastic because the percentage increase in total revenue (20%) is greater than the percentage increase in price (10%), indicating that the quantity demanded doesn't decrease proportionally with an increase in price.

If the Total Revenue Received by Sellers of DVDs Increases