Which of the following is true?
I.The demand for a good is elastic if when its price changes,the percentage change in the quantity demanded exceeds the percentage change in price.
II.Price elasticity of demand equals the percentage change in price divided by the percentage change in the quantity demanded.
III.If demand is price inelastic,a rise in price leads to a decrease in total revenue.
A) Only I
B) Only II
C) Only III
D) I and II
E) II and III

Question

Quizplus · Accepted Answer

The demand for a good is elastic if the percentage change in quantity demanded is greater than the percentage change in price. This is described in statement I. Statement II is incorrect because price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price. Statement III is incorrect because if demand is price inelastic, a rise in price leads to an increase in total revenue.

Which of the Following Is True