Question

If the price of good X rises and the demand for good X is elastic, then the percentage __________ in quantity demanded is __________ the percentage rise in price, and total revenue __________.

Answer 1

1) Decrease

2) Greater than

3) Decreases

Step-by-step explanation:

If a good has elastic demand it means that when the price of a good changes by 1% the quantity demanded of the good changes by more than 1%. So if the demand for good x is elastic it means when the price of good x rises by 1 % than the demand for good x decreases by more than 1 percent. Therefore the total revenue of a elastic good decreases when price is increased and the total revenue increases when price decreased.