If some product has an elastic demand, then we can expect
A)a price increase to increase total revenue.
B)total revenue to rise if price falls.
C)that there are few substitutes for this product.
D)the absolute value of the elasticity of demand coefficient to be less than 1.
E)a smaller percentage change in the quantity demanded, given some percentage change in the price.

Question

Quizplus · Accepted Answer

If a product has an elastic demand, it means that consumers are very sensitive to changes in its price. Therefore, if the price falls, it is likely that more consumers will be willing to purchase the product leading to an increase in the total revenue. Conversely, if the price increases, it may lead to a decrease in the quantity demanded and therefore a decrease in total revenue.

If Some Product Has an Elastic Demand, Then We Can