-The figure above represents the behavior 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 unit elastic.
C) Demand is elastic.
D) It is impossible to determine.

Question

-The figure above represents the behavior 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 unit elastic. 
C) Demand is 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 percentage change in quantity demanded is greater than the percentage change in price, so demand is elastic.

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