Which of the following describes a situation in which demand must be elastic?
A) The price of dish soap rises by 10 cents, and quantity of dish soap demanded falls by 50.
B) The price of dish soap rises by 10 cents, and total revenue rises.
C) A 20 percent increase in the price of dish soap leads to a 20 percent decrease in the quantity of dish soap demanded.
D) Total revenue does not change when the price of dish soap rises.
E) Total revenue decreases when the price of dish soap rises.

Question

Quizplus · Accepted Answer

When demand is elastic, an increase in price leads to a decrease in total revenue, as consumers reduce their quantity demanded significantly.

Which of the Following Describes a Situation in Which Demand