Which of the following statements about price elasticity is false?
A)Steak is an example of a product that has an elastic demand for most people, because when price goes up quantity demanded goes down proportionally more.
B)Elasticity of demand is the relative responsiveness of a change in quantity demanded to changes in price.
C)If marketers can determine price elasticity, then setting prices at optimum levels is much easier.
D)When price is raised on a product that has an inelastic demand, then total revenue will decrease.
E)A product like electricity has an inelastic demand.

Question

Quizplus · Accepted Answer

This statement is false. When price is raised on a product that has an inelastic demand, then total revenue will increase because the increase in price will offset the decrease in quantity demanded to a greater extent.

Which of the Following Statements About Price Elasticity Is False