The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-If the demand for corn is elastic, then:
A)there are not many substitutes for the consumption of corn.
B)the price elasticity of demand for corn is less than -1.
C)a decrease in price will reduce total revenue for corn producers.
D)an increase in price will increase total revenue for corn producers.
E)consumers will continue buying the same quantity even if price increases.

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-If the demand for corn is elastic, then:
A)there are not many substitutes for the consumption of corn. 
B)the price elasticity of demand for corn is less than -1. 
C)a decrease in price will reduce total revenue for corn producers. 
D)an increase in price will increase total revenue for corn producers. 
E)consumers will continue buying the same quantity even if price increases.

Quizplus · Accepted Answer

When the demand for a good is elastic, it means that the quantity demanded responds significantly to price changes. A price elasticity of demand less than -1 indicates that the percentage change in quantity demanded is greater than the percentage change in price, which is characteristic of elastic demand.

The Figure Given Below Shows the Demand Curves for Five