If the total revenue received by sellers of DVDs increases by 20 percent when price increases by 10 percent, then demand for DVDs is
A) perfectly elastic.
B) unitary elastic.
C) inelastic.
D) elastic.

Question

Quizplus · Accepted Answer

When the price increases and total revenue also increases, it indicates that the demand is inelastic. This is because consumers are not significantly reducing their quantity demanded in response to the price increase.

If the Total Revenue Received by Sellers of DVDs Increases