Which of the following is true?
i.The demand for a good is elastic if when its price changes,the percentage change in the quantity demanded exceeds the percentage change in price.
ii.Price elasticity of demand equals the percentage change in price divided by the percentage change in the quantity demanded.
iii.If demand is price inelastic,a rise in price leads to a decrease in total revenue.
A) only i
B) only ii
C) only iii
D) i and ii
E) ii and iii

Question

Quizplus · Accepted Answer

i is true because elasticity measures how much the quantity demanded of a good responds to a change in the price of that good, with elastic demand indicating a greater percentage change in quantity demanded than in price. ii is incorrect because price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, not the other way around. iii is incorrect because if demand is price inelastic, a rise in price will actually lead to an increase in total revenue, not a decrease.

Which of the Following Is True