Using the Method of Arc Elasticity to Calculate Price Elasticity

question 125

Multiple Choice

Using the method of arc elasticity to calculate price elasticity of demand eliminates the problem of:

• A) different elasticities, depending on whether price decreases or increases.
• B) different elasticities, because price and quantity are inversely related on the demand curve.
• C) total revenue falling when price falls and demand is inelastic.
• D) total revenue increasing when price falls and demand is elastic.

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