Exhibit 5.5

-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following is not true in the range of the total revenue curve labeled A?
A)Demand is inelastic.
B)Total revenue is increasing.
C)Total revenue is positive.
D)Demand is elastic.
E)Demand elasticity decreases as total revenue decreases.

Question

Exhibit 5.5
 
-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following is not true in the range of the total revenue curve labeled A?
A)Demand is inelastic. 
B)Total revenue is increasing. 
C)Total revenue is positive. 
D)Demand is elastic. 
E)Demand elasticity decreases as total revenue decreases.

Quizplus · Accepted Answer

In the range labeled A, demand is elastic, not inelastic. When demand is elastic, total revenue increases as price decreases.

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