Exhibit 5-8
-In Exhibit 5-8, which of the following statements is true at a quantity of 10?
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 
-In Exhibit 5-8, which of the following statements is true at a quantity of 10?
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

At a quantity of 10, the total revenue is $50, which is the same as the total revenue at a quantity of 5. This means that the demand is unit elastic, as a 10% increase in quantity sold results in a 10% decrease in price and the total revenue stays the same.

Exhibit 5-8 -In Exhibit 5-8, Which of the Following Statements Is True