Figure 5-1

-Refer to Figure 5-1.If the price decreased from $18 to $6,what would happen to total revenue and what would this imply about demand elasticity
A)Total revenue would increase by $1200 and demand would be elastic.
B)Total revenue would increase by $800 and demand would be elastic.
C)Total revenue would decrease by $1200 and demand would be inelastic.
D)Total revenue would decrease by $800 and demand would be inelastic.

Question

Figure 5-1
 
-Refer to Figure 5-1.If the price decreased from $18 to $6,what would happen to total revenue and what would this imply about demand elasticity
A)Total revenue would increase by $1200 and demand would be elastic. 
B)Total revenue would increase by $800 and demand would be elastic. 
C)Total revenue would decrease by $1200 and demand would be inelastic. 
D)Total revenue would decrease by $800 and demand would be inelastic.

Quizplus · Accepted Answer

When the price decreases and total revenue increases, it implies that demand is elastic. The increase in total revenue by $1200 suggests that the percentage increase in quantity demanded is greater than the percentage decrease in price, indicating elastic demand.

Figure 5-1 -Refer to Figure 5-1.If the Price Decreased from $18 to Decreased