Exhibit 5-8
-Which of the following statements is true in the range of the total revenue curve labeled B in Exhibit 5-8?
A) Demand is elastic.
B) Demand is inelastic.
C) Demand is unit elastic.
D) We cannot tell anything about elasticity of demand because this is a total revenue curve.
E) Demand is perfectly elastic.

Question

Exhibit 5-8 
-Which of the following statements is true in the range of the total revenue curve labeled B in Exhibit 5-8?
A) Demand is elastic. 
B) Demand is inelastic. 
C) Demand is unit elastic. 
D) We cannot tell anything about elasticity of demand because this is a total revenue curve. 
E) Demand is perfectly elastic.

Quizplus · Accepted Answer

In the range of the total revenue curve labeled B, a decrease in price results in a decrease in total revenue. This indicates that demand is inelastic, as the change in quantity demanded is proportionally smaller than the change in price.

Exhibit 5-8 -Which of the Following Statements Is True in the Range