Elastic demand exists when a(n)
A)a small percentage decrease in price produces a smaller percentage increase in quantity demanded and total revenue falls.
B)a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
C)an increase in price causes a larger increase in quantity demanded and total revenue falls to zero.
D)the quantity demanded remains the same regardless of level of price and total revenue is unchanged.
E)a small percentage decrease in price produces a smaller percentage decrease in quantity demanded and total revenue increases.

Question

Quizplus · Accepted Answer

Elastic demand exists when a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases. This means that the demand is highly responsive to changes in price and a decrease in price leads to a significant increase in demand which results in an overall increase in revenue.

Elastic Demand Exists When A(n)