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A price change causes the quantity demanded of a good to increase by 15%, while the total revenue of that good increases by 10%.

True or False: The demand curve is elastic in this region.
a.True
b.False

User Nalo
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1 Answer

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Final answer:

The demand curve is elastic in this region because the quantity demanded increased by a larger percentage than the increase in total revenue.

Step-by-step explanation:

The statement is True that the demand curve is elastic in this region.

In economics, the concept of price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. When the percentage change in quantity demanded is greater than the percentage change in price, it indicates that the demand is elastic. In this case, the 15% increase in quantity demanded is greater than the 10% increase in total revenue, suggesting that the demand curve is elastic.

Price elasticities of demand are measured as absolute values, so even though they are negative numbers indicating the downward sloping demand curve, they are read as positive values.

User BraaterAfrikaaner
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