Compared to the 1980s, the price of computer chips is much lower today and revenues from computer chips are _____ because demand is _____.
A) higher; elastic
B) lower; inelastic
C) approximately unchanged; unit elastic
D) higher; inelastic

Question

Quizplus · Accepted Answer

The price of computer chips has decreased, but revenues are higher because the demand for computer chips is elastic, meaning that the decrease in price has led to a proportionally larger increase in quantity demanded, thus increasing total revenue.

Compared to the 1980s, the Price of Computer Chips Is