Use the following for questions 116-119.
Exhibit: The Demand for Macintosh Computers

-(Exhibit: Demand for Macintosh Computers) The change in the firm's total revenue resulting from a change in price from P to T suggests that demand is:
A) nonelastic.
B) price elastic.
C) price inelastic.
D) unit price elastic.

Question

Use the following for questions 116-119.
Exhibit: The Demand for Macintosh Computers
 
-(Exhibit: Demand for Macintosh Computers) The change in the firm's total revenue resulting from a change in price from P to T suggests that demand is:
A) nonelastic. 
B) price elastic. 
C) price inelastic. 
D) unit price elastic.

Quizplus · Accepted Answer

The fact that a relatively small change in price (from P to T) caused a relatively large change in total revenue suggests that demand is price elastic. In other words, consumers are sensitive to changes in price and will adjust their purchasing behavior accordingly.

Use the Following for Questions 116-119