The list below refers to the price elasticity of demand.
1)perfectly inelastic
2)perfectly elastic
3)unitary elasticity
4)elastic
5)inelastic
-Refer to the information above to answer this question.What is a demand when an increase in price raises total revenue?
A)1.
B)2.
C)3.
D)4.
E)5.

Question

Quizplus · Accepted Answer

When an increase in price raises total revenue, it means that the demand is inelastic, as buyers are not very sensitive to changes in price. Therefore, the correct choice is option 5, inelastic. Options 1, 2, and 3 refer to extreme cases where the price elasticity is either zero, infinity, or exactly one, respectively. Option 4 refers to a situation where a change in price has a disproportionate effect on the quantity demanded, leading to a change in revenue in the opposite direction.

The List Below Refers to the Price Elasticity of Demand