The demand for a good is elastic if
A) an increase in its price results in an increase in total revenue.
B) a decrease in its price results in a decrease in total revenue.
C) an increase in its price results in a decrease in total revenue.
D) the good is a necessity.

Question

Quizplus · Accepted Answer

When demand is elastic, an increase in price leads to a proportionally larger decrease in quantity demanded, causing total revenue to fall.

The Demand for a Good Is Elastic If