The demand for a good is elastic if _____
A)an increase in price leads to a decrease in total revenue.
B)an increase in price leads to an increase in total revenue.
C)an increase in price causes no change in total revenue.
D)a decrease in price causes no changes in total revenue.
E)a decrease in price leads to a decrease in total revenue.

Question

Quizplus · Accepted Answer

When the demand for a good is elastic, a small change in price leads to a proportionately larger change in the quantity demanded. This means that an increase in price would lead to a decrease in total revenue, as consumers are less willing to purchase the good at a higher price, resulting in fewer sales.

The Demand for a Good Is Elastic If _____