When the percentage change in quantity demanded is less than the percentage change in price:
A) demand is price elastic.
B) demand is price inelastic.
C) an increase in price will result in lower total revenue.
D) total revenue will be zero at the midpoint of a linear demand curve.

Question

Quizplus · Accepted Answer

This indicates that demand is price inelastic, as a change in price has a relatively small impact on the quantity demanded. This may imply that consumers are less sensitive to changes in price or that there are few substitutes available. Additionally, an increase in price may result in higher total revenue, as the increase in price may outweigh the decrease in quantity demanded.

When the Percentage Change in Quantity Demanded Is Less Than