What happens when demand is elastic?
A)As price goes up,revenue goes down.
B)As price goes down,revenue goes down.
C)As price goes up,revenue goes up.
D)As price goes up,revenue does not change.

Question

Quizplus · Accepted Answer

When demand is elastic, consumers are sensitive to changes in price, and as price goes up, demand for the product decreases significantly, which causes revenue to go down. Similarly, if the price goes down, the demand for the product goes up, and revenue increases. Therefore, the best choice is A, as price and revenue have an inverse relationship in elastic demand.

What Happens When Demand Is Elastic