(Figure: Price Decrease and Elasticity) Refer to the figure. Ifprice decreases from $20 to $10, total revenue will:Figure: Price Decrease and Elasticity
A)decrease by $1,500, so the demand curve is inelastic.
B)decrease by $2,500, so the demand curve is inelastic.
C)increase by $1,500, so the demand curve is elastic.(True Answer )Correct
D)increase by $2,500, so the demand curve is elastic.

Question

(Figure: Price Decrease and Elasticity) Refer to the figure. Ifprice decreases from $20 to $10, total revenue will:Figure: Price Decrease and Elasticity 
A)decrease by $1,500, so the demand curve is inelastic. 
B)decrease by $2,500, so the demand curve is inelastic. 
C)increase by $1,500, so the demand curve is elastic.(True Answer )Correct 
D)increase by $2,500, so the demand curve is elastic.

Quizplus · Accepted Answer

According to the figure, the demand curve is elastic as the quantity demanded increases significantly with a decrease in price. When price decreases from $20 to $10, the quantity demanded increases from 50 units to 100 units, resulting in an increase in total revenue by $1,500 (100 units x $15). Therefore, the correct answer is C.

(Figure: Price Decrease and Elasticity) Refer to the Figure