Recall the Application about the price of vanity license plates in Virginia to answer the following question(s).
-Recall the application.Why would a decrease in price for vanity plates reduce the total revenue that the state of Virginia will receive from vanity plates?
A) The demand for vanity plates in Virginia is inelastic.
B) The demand for vanity plates in Virginia is elastic.
C) The demand for vanity plates in Virginia is equal to 1.
D) There is insufficient information to draw a conclusion.

Question

Quizplus · Accepted Answer

When demand is inelastic, a decrease in price leads to a proportionally smaller increase in quantity demanded, thus reducing total revenue.

Recall the Application About the Price of Vanity License Plates