If a 10 percent cut in the price of video rentals at "That's Rentertainment" causes a 15 percent increase in the quantity of rentals demanded, then
A) total revenue will decrease
B) demand is price inelastic within that price range
C) demand is price elastic within that range
D) demand is unit elastic within that range
E) total revenue will remain the same

Question

Quizplus · Accepted Answer

Demand is considered price elastic when the percentage change in quantity demanded is greater than the percentage change in price, which is the case here (15% increase in quantity demanded vs. 10% decrease in price).

If a 10 Percent Cut in the Price of Video