Which combination of factors would lead to large price and total revenue changes?
A)inelastic demand for a product and large swings in supply
B)elastic demand for a product and small swings in supply
C)inelastic demand for a product and constant supply
D)a and c
E)none of the above

Question

Quizplus · Accepted Answer

Inelastic demand means that changes in price have a relatively small effect on the quantity demanded, while large swings in supply mean that there are significant fluctuations in the amount of the product available. When these two factors are combined, even a small change in supply can lead to a large change in price, which in turn will cause a large change in total revenue. Therefore, option A is the best choice.

Which Combination of Factors Would Lead to Large Price and Total