Exhibit 5.3

-Refer to Exhibit 5.3 which shows a linear demand curve.As you move from point B to point C along the demand curve,total revenue _____ and the demand is _____.
A)stays the same; unitary
B)decreases; inelastic
C)increases; elastic
D)decreases; elastic
E)increases, inelastic

Question

Exhibit 5.3
 
-Refer to Exhibit 5.3 which shows a linear demand curve.As you move from point B to point C along the demand curve,total revenue _____ and the demand is _____.
A)stays the same; unitary 
B)decreases; inelastic 
C)increases; elastic 
D)decreases; elastic 
E)increases, inelastic

Quizplus · Accepted Answer

Moving from point B to point C along a linear demand curve typically involves lowering the price to sell more units. If total revenue decreases in this process, it indicates that the percentage decrease in price is greater than the percentage increase in quantity demanded, which is characteristic of inelastic demand.

Exhibit 5.3 -Refer to Exhibit 5.3 Which Shows a Linear Demand Curve.As