If the price of herring increases by 8%, and the quantity demanded falls by 20%, demand is _____. This decrease in price will therefore lead to a(n) _____ in total revenue.
A)elastic; decrease
B)inelastic; increase
C)unit-elastic; unchange
D)normal; mismatch

Question

Quizplus · Accepted Answer

A decrease in quantity demanded by 20% indicates a relatively high degree of responsiveness to changes in price, making the demand for herring elastic. An 8% increase in price will therefore result in a decrease in total revenue.

If the Price of Herring Increases by 8%, and the Quantity