Exhibit 4-C
-Refer to Exhibit 4-C.Graph A represents a demand curve that is relatively ____.Total revenue ____ as the price decreases from $10 to $5.
A)inelastic; decreases
B)elastic; decreases
C)elastic; increases
D)inelastic; increases

Question

Exhibit 4-C 
-Refer to Exhibit 4-C.Graph A represents a demand curve that is relatively ____.Total revenue ____ as the price decreases from $10 to $5.
A)inelastic; decreases 
B)elastic; decreases 
C)elastic; increases 
D)inelastic; increases

Quizplus · Accepted Answer

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

Exhibit 4-C -Refer to Exhibit 4-C.Graph a Represents a Demand Curve That