What does it tell you if demand is price elastic?
A) A price decrease increases revenue.
B) The percentage change in quantity demand is less than the change in price.
C) The value of price elasticity is less than 1.
D) There are likely to be few substitutes.

Question

Quizplus · Accepted Answer

When demand is price elastic, a decrease in price leads to a proportionally larger increase in the quantity demanded, thereby increasing total revenue. This is because the percentage change in quantity demanded is greater than the percentage change in price.

What Does It Tell You If Demand Is Price Elastic