When Charles lowers the price of cheese plates by 25 percent, the quantity demanded increases by 50 percent. The demand for cheese plates is _____, and Charles' total revenue _____ as a result of the price change.
A) elastic; increases
B) inelastic; decreases
C) elastic; decreases
D) inelastic; increases

Question

Quizplus · Accepted Answer

The demand for cheese plates is elastic because the percentage change in quantity demanded (50%) is greater than the percentage change in price (25%), leading to an increase in total revenue. Elastic demand means consumers are highly responsive to price changes.

When Charles Lowers the Price of Cheese Plates by 25