What happens when demand is elastic?
A) As price goes up,revenue does not change.
B) As price goes down,revenue goes down.
C) As price goes down,revenue does not change.
D) As price goes up,revenue goes down.

Question

Quizplus · Accepted Answer

When the demand is elastic, a change in price leads to a significant change in the quantity demanded. Therefore, if the price goes up, the demand for the product will decrease, leading to a decrease in revenue. Similarly, if the price goes down, the demand for the product will increase, also leading to a decrease in revenue. Therefore, as price goes up, revenue goes down when the demand is elastic.

What Happens When Demand Is Elastic