-In the figure above,when the price falls from $8 to $7,total revenue
A) increases from $120 to $210 so demand is elastic.
B) decreases from $210 to $120 so demand is inelastic.
C) increases from $120 to $210 so demand is inelastic.
D) decreases from $210 to $120 so demand is elastic.
E) increases from $120 to $210, but more information is needed to determine whether demand is elastic, inelastic, or unit elastic.

Question

-In the figure above,when the price falls from $8 to $7,total revenue
A) increases from $120 to $210 so demand is elastic. 
B) decreases from $210 to $120 so demand is inelastic. 
C) increases from $120 to $210 so demand is inelastic. 
D) decreases from $210 to $120 so demand is elastic. 
E) increases from $120 to $210, but more information is needed to determine whether demand is elastic, inelastic, or unit elastic.

Quizplus · Accepted Answer

When the price falls and total revenue increases, it indicates that the demand is elastic. This is because the percentage change in quantity demanded is greater than the percentage change in price, leading to an increase in total revenue.

-In the Figure Above,when the Price Falls from $8 to $7,total