Figure 5-9
-Refer to Figure 5-9. Suppose this demand curve is a straight, downward-sloping line all the way from the horizontal intercept to the vertical intercept. We choose two prices, P₁ and P₂, and the corresponding quantities demanded, Q₁ and Q₂, for the purpose of calculating the price elasticity of demand. Also suppose P₂>P_1.In which of the following cases could we possibly find that (i) demand is elastic and (ii) an increase in price from P₁ to P₂ causes an increase in total revenue?

Question

Figure 5-9

-Refer to Figure 5-9. Suppose this demand curve is a straight, downward-sloping line all the way from the horizontal intercept to the vertical intercept. We choose two prices, P₁ and P₂, and the corresponding quantities demanded, Q₁ and Q₂, for the purpose of calculating the price elasticity of demand. Also suppose P₂>P_1.In which of the following cases could we possibly find that (i) demand is elastic and (ii) an increase in price from P₁ to P₂ causes an increase in total revenue?

Quizplus · Accepted Answer

The Answer of Figure 5-9 -Refer to Figure 5-9. Suppose this demand curve is a straight, downward-sloping line all the way from the horizontal intercept to the vertical intercept. We choose two prices, P₁ and P₂, and the corresponding quantities demanded, Q₁ and Q₂, for the purpose of calculating the price elasticity of demand. Also suppose P₂>P_1.In which of the following cases could we possibly find that (i) demand is elastic and (ii) an increase in price from P₁ to P₂ causes an increase in total revenue? A)0 < P₁< P₂< $10. B)$10 < P₁< P₂< $15. C)P₁> $15. D)None of the above is correct.

Figure 5-9 -Refer to Figure 5-9. Suppose This Demand Curve Is a Curve