Asked by Brandon Ramdeholl on Jun 17, 2024
Verified
Which of the following statements is inconsistent with an elastic demand curve?
A) The price-elasticity coefficient is greater than 1.
B) Total revenue increases when price increases.
C) Buyers are relatively sensitive to price changes.
D) The relative change in quantity exceeds the relative change in price.
Elastic Demand
A market condition where the quantity demanded of a good or service significantly changes in response to changes in its price.
Price-Elasticity Coefficient
A calculation that assesses how a product's demand level shifts when its price varies.
Total Revenue
The total amount of money received by a company from sales of its products or services before any expenses are subtracted.
- Clarify the differences among elastic, inelastic, unit-elastic, perfectly inelastic, and perfectly elastic demand.
Verified Answer
TD
Tyrone DixonJun 22, 2024
Final Answer :
B
Explanation :
An elastic demand curve indicates that consumers are highly responsive to price changes, meaning that an increase in price will lead to a larger percentage decrease in quantity demanded. Therefore, total revenue would decrease, not increase, when prices rise, making statement B inconsistent with an elastic demand curve.
Learning Objectives
- Clarify the differences among elastic, inelastic, unit-elastic, perfectly inelastic, and perfectly elastic demand.