The demand for a good is elastic if
A)an increase in price leads to a decrease in total revenue
B)an increase in price leads to an increase in total revenue
C)an increase in price causes no change in total revenue
D)total revenue is maximum
E)total revenue is minimum

Question

Quizplus · Accepted Answer

The demand for a good is elastic if an increase in price leads to a decrease in total revenue. This means that consumers are very sensitive to changes in price and will reduce their quantity demanded significantly when prices increase, resulting in a decrease in total revenue for the producer.

The Demand for a Good Is Elastic If