Exhibit 5.5

-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true in the range of the total revenue curve labeled A?
A)Demand is elastic.
B)Demand is inelastic.
C)Demand is unit elastic.
D)Demand is perfectly inelastic.
E)Demand is perfectly elastic.

Question

Exhibit 5.5
 
-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true in the range of the total revenue curve labeled A?
A)Demand is elastic. 
B)Demand is inelastic. 
C)Demand is unit elastic. 
D)Demand is perfectly inelastic. 
E)Demand is perfectly elastic.

Quizplus · Accepted Answer

In the range labeled A, the total revenue curve is rising, indicating that a decrease in price leads to a proportionally larger increase in quantity demanded, which is characteristic of elastic demand.

Exhibit 5.5 -Refer to Exhibit 5.5,which Shows the Total Revenue Curve for Total