When demand is elastic
A)the percentage change in quantity is greater than the percentage change in price.
B)a price increase lowers total revenue.
C)buyers are sensitive to price changes.
D)the elasticity coefficient is greater than one.
E)All of the statements are true.

Question

Quizplus · Accepted Answer

All of the statements are true when demand is elastic. When buyers are sensitive to price changes, a small increase in price results in a larger percentage decrease in the quantity demanded, leading to a net decrease in total revenue. The elasticity coefficient, which measures the responsiveness of quantity demanded to a change in price, is greater than one in this case.

When Demand Is Elastic