Figure 5-6
-Refer to Figure 5-6.For prices above $8,demand is price
A)elastic,and total revenue will rise as price rises.
B)inelastic,and total revenue will rise as price rises.
C)elastic,and total revenue will fall as price rises.
D)inelastic,and total revenue will fall as price rises.

Question

Figure 5-6 
-Refer to Figure 5-6.For prices above $8,demand is price
A)elastic,and total revenue will rise as price rises. 
B)inelastic,and total revenue will rise as price rises. 
C)elastic,and total revenue will fall as price rises. 
D)inelastic,and total revenue will fall as price rises.

Quizplus · Accepted Answer

In the area above $8, demand is elastic which means that an increase in price will result in a more than proportionate decrease in quantity demanded leading to a fall in total revenue. Therefore, C is the correct answer.

Figure 5-6 -Refer to Figure 5-6.For Prices Above $8,demand Is Price