When the price of peanut butter rises by 4 percent,total revenue decreases by 8 percent.The demand for peanut butter is
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly elastic.
E)perfectly inelastic.

Question

Quizplus · Accepted Answer

The fact that a 4% increase in price leads to an 8% decrease in total revenue indicates that the demand for peanut butter is sensitive to price changes, which is characteristic of elastic demand.

When the Price of Peanut Butter Rises by 4 Percent,total