Total revenue received by surfboard manufacturers increases by $2 million when the price of a surfboard decreases by $10. The price the elasticity of demand for surfboards is
A) between 0 and 1.
B) greater than 1.
C) equal to 0.
D) some amount that is impossible to determine without more information.

Question

Quizplus · Accepted Answer

The increase in total revenue when the price decreases indicates that the demand is elastic, meaning the price elasticity of demand is greater than 1.

Total Revenue Received by Surfboard Manufacturers Increases by $2 Million