Exhibit 6-2 -Refer to Exhibit 6-2. Elasticity varies along a linear demand curve. Graph B represents the section of the curve where: A)the curve is elastic. B)E_d is 1. C)starting at P₁, an increase in price will lead to a decrease in total revenue. D)all of the above are correct.

Question

Exhibit 6-2 -Refer to Exhibit 6-2. Elasticity varies along a linear demand curve. Graph B represents the section of the curve where: A)the curve is elastic. B)E_d is > 1. C)starting at P₁, an increase in price will lead to a decrease in total revenue. D)all of the above are correct.

Quizplus · Accepted Answer

Graph B represents the elastic portion of a linear demand curve, where the price elasticity of demand is greater than 1, meaning that a percentage change in price leads to a larger percentage change in quantity demanded. In this section, an increase in price will indeed lead to a decrease in total revenue, as the proportional decrease in quantity demanded will outweigh the increase in price.

​Exhibit 6-2 ​

Exhibit 6-2