Use the following to answer question(s): Demand and Price Elasticity 2

-(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points A and B is:
A) elastic, since total revenue falls when price falls from $8 to $6.
B) elastic, since total revenue increases when price falls from $8 to $6.
C) inelastic, since the percentage change in quantity is less than the percentage change in price when price falls from $8 to $6.
D) positive, because the slope is negative.

Question

Use the following to answer question(s): Demand and Price Elasticity 2
 
-(Exhibit: Demand and Price Elasticity 2) The price elasticity of demand between points A and B is:
A) elastic, since total revenue falls when price falls from $8 to $6. 
B) elastic, since total revenue increases when price falls from $8 to $6. 
C) inelastic, since the percentage change in quantity is less than the percentage change in price when price falls from $8 to $6. 
D) positive, because the slope is negative.

Quizplus · Accepted Answer

The price elasticity of demand is considered elastic if the percentage change in quantity demanded is greater than the percentage change in price, leading to an increase in total revenue when the price decreases. Between points A and B, if total revenue increases when the price falls from $8 to $6, it indicates that the demand is elastic.

Use the Following to Answer Question(s): Demand and Price Elasticity