Figure 5-7

-Refer to Figure 5-7.If rectangle D is larger than rectangle A,then
A)demand is elastic between prices P₁ and P₂.
B)a decrease in price from P₂ to P₁ will cause an increase in total revenue.
C)the magnitude of the percent change in price between P₁ and P₂ is smaller than the magnitude of the corresponding percent change in quantity demanded.
D)All of the above are correct.

Question

Figure 5-7
 
-Refer to Figure 5-7.If rectangle D is larger than rectangle A,then
A)demand is elastic between prices P₁ and P₂. 
B)a decrease in price from P₂ to P₁ will cause an increase in total revenue. 
C)the magnitude of the percent change in price between P₁ and P₂ is smaller than the magnitude of the corresponding percent change in quantity demanded. 
D)All of the above are correct.

Quizplus · Accepted Answer

If rectangle D is larger than rectangle A, it indicates that the total revenue increases as the price decreases, which means demand is elastic. Therefore, all statements A, B, and C are correct.

Figure 5-7 -Refer to Figure 5-7.If Rectangle D Is Larger Than Rectangle