When price was 10,quantity demanded was 50.When price decreased to 8,quantity demanded increased to 60.Therefore,when price decreased,total revenue
A) decreased from 500 to 480, indicating that demand is inelastic.
B) decreased from 500 to 480, indicating that demand is elastic.
C) increased from 480 to 500, indicating that demand is inelastic.
D) increased from 480 to 500, indicating that demand is elastic.

Question

Quizplus · Accepted Answer

When the price decreases from 10 to 8, the quantity demanded increases from 50 to 60. This means that the demand is elastic, as the percentage change in quantity demanded is greater than the percentage change in price. Therefore, the total revenue will decrease, as the price decrease outweighs the quantity increase.

When Price Was 10,quantity Demanded Was 50