Figure 5-5

-Refer to Figure 5-5.An increase in price from $30 to $35 would
A)increase total revenue by $250
B)decrease total revenue by $250.
C)increase total revenue by $500.
D)decrease total revenue by $500.

Question

Figure 5-5
 
-Refer to Figure 5-5.An increase in price from $30 to $35 would
A)increase total revenue by $250 
B)decrease total revenue by $250. 
C)increase total revenue by $500. 
D)decrease total revenue by $500.

Quizplus · Accepted Answer

An increase in price from $30 to $35 would decrease total revenue by $250 because the demand is likely elastic in this range, meaning the percentage decrease in quantity demanded is greater than the percentage increase in price, leading to a decrease in total revenue.

Figure 5-5 -Refer to Figure 5-5.An Increase in Price from $30 to Price