When demand is elastic
A) changes in price and changes in total revenue move in the same direction.
B) there is no relationship between changes in price and changes in total revenue.
C) changes in price and changes in total revenue move in opposite directions.
D) for any change in price, total revenue will not change.

Question

Quizplus · Accepted Answer

When demand is elastic, a change in price leads to a larger change in quantity demanded. As a result, when the price is decreased, the total revenue increases because the quantity demanded increases by a greater percentage and vice versa. Therefore, changes in price and changes in total revenue move in opposite directions.

When Demand Is Elastic