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

-(Exhibit: Demand and Price Elasticity 2) From the graph it can be seen that, along a given segment of the demand curve, if price falls and total revenue _________, then demand is price elastic.
A) increases
B) decreases
C) stays the same
D) decreases at first and then increases

Question

Use the following to answer question(s): Demand and Price Elasticity 2
 
-(Exhibit: Demand and Price Elasticity 2) From the graph it can be seen that, along a given segment of the demand curve, if price falls and total revenue _________, then demand is price elastic.
A) increases 
B) decreases 
C) stays the same 
D) decreases at first and then increases

Quizplus · Accepted Answer

When price falls and total revenue increases, it indicates that the quantity demanded increased by a proportion greater than the decrease in price, which is characteristic of price elastic demand.

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