Suppose the price elasticity of demand for eggs is −0.27. Therefore, an increase in the price of eggs will cause:
A) a decrease in egg suppliers' total revenue.
B) an increase in the demand for eggs.
C) an increase in egg suppliers' total revenue.
D) an increase in the quantity demand of eggs.

Question

Quizplus · Accepted Answer

The price elasticity of demand for eggs is inelastic (absolute value less than 1), meaning that a price increase will lead to a less than proportionate decrease in quantity demanded, thus increasing total revenue for egg suppliers.

Suppose the Price Elasticity of Demand for Eggs Is −0