Use the following for questions 108-115.
Exhibit: The Demand for Bungalow Bob's Bagels

-(Exhibit: The Demand for Bungalow Bob's Bagels) Total revenue increases if the price ________ from ________.
A) decreases; $0.50 to $0.40
B) decreases; $0.70 to $0.60
C) increases; $0.50 to $0.60
D) increases; $0.70 to $0.80

Question

Use the following for questions 108-115.
Exhibit: The Demand for Bungalow Bob's Bagels
 
-(Exhibit: The Demand for Bungalow Bob's Bagels) Total revenue increases if the price ________ from ________.
A) decreases; $0.50 to $0.40 
B) decreases; $0.70 to $0.60 
C) increases; $0.50 to $0.60 
D) increases; $0.70 to $0.80

Quizplus · Accepted Answer

According to the demand curve depicted in the exhibit, as the price decreases from $0.70 to $0.60, the quantity demanded increases from 800 to 900, resulting in an increase in total revenue. This means that the demand for Bungalow Bob's Bagels is price elastic within this price range. The other options either show a decrease in total revenue (A and C) or do not show a significant change in total revenue (D).

Use the Following for Questions 108-115