Figure 5-10 -Refer to Figure 5-10.If rectangle D is larger than rectangle A,then A)demand is elastic between prices P₁ and P₂. B)a decrease in price from P₂ to P₁ will cause an increase in total revenue. C)the magnitude of the percent change in price between P₁ and P₂ is smaller than the magnitude of the corresponding percent change in quantity demanded. D)All of the above are correct.

Question

Quizplus · Accepted Answer

If rectangle D is larger than rectangle A, it means that the percentage change in quantity demanded is greater than the percentage change in price. This indicates that demand is elastic within the range of prices between P₁ and P₂. As a result, a decrease in price from P₂ to P₁ will cause an increase in total revenue due to the significant increase in the quantity demanded. Thus, all of the above statements are correct.

Figure 5-10 -Refer to Figure 5-10.If Rectangle D Is Larger Than Rectangle