The price-elasticity coefficients are 2.6, 0.5, 1.4, and 0.18 for four different demand schedules,D1, D2, D3, and D4, respectively. A 2-percent increase in price will result in an increase in total revenues in which of the following cases? A) D₁and D₃ B) D₁and D₄ C) ^D₂^and^D₄ D) D₁, D₂, and D₃

Question

Quizplus · Accepted Answer

A price-elasticity coefficient less than 1 indicates inelastic demand, meaning total revenue increases when price increases. D2 (0.5) and D4 (0.18) are inelastic.

The Price-Elasticity Coefficients Are 2