Exhibit 5-6

-We can tell that demand is elastic as price increases between point b and point a in Exhibit 5-6 because:
A) Quantity demanded is decreasing
B) Total revenue is increasing
C) Total revenue is decreasing
D) Total revenue is unchanged
E) Demand curve slopes downward

Question

Exhibit 5-6
 
-We can tell that demand is elastic as price increases between point b and point a in Exhibit 5-6 because:
A) Quantity demanded is decreasing 
B) Total revenue is increasing 
C) Total revenue is decreasing 
D) Total revenue is unchanged 
E) Demand curve slopes downward

Quizplus · Accepted Answer

When demand is elastic, an increase in price leads to a decrease in total revenue, indicating that the percentage decrease in quantity demanded is greater than the percentage increase in price.

Exhibit 5-6 -We Can Tell That Demand Is Elastic as Price Increases