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

Question

Quizplus · Accepted Answer

When demand is inelastic, an increase in price leads to an increase in total revenue because the percentage change in quantity demanded is less than the percentage change in price.

Which of the Following Describes a Situation in Which Demand