Suppose the Price of a Good Is $6 and Quantity

question 12

Multiple Choice

Suppose the price of a good is $6 and quantity demanded is 10 units. When price decreases to $5, quantity demanded increases to 13 units. What happened to total revenue and what does this indicate?

• A) Total revenue decreased from $65 to $60, indicating that demand is inelastic.
• B) Total revenue decreased from $65 to $60, indicating that demand is elastic.
• C) Total revenue increased from $60 to $65, indicating that demand is inelastic.
• D) Total revenue increased from $60 to $65, indicating that demand is elastic.

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Definitions:

Purchasing

The buying of all the materials needed by the organization; also called procurement.

Garment Manufacturing

The process of converting fabric into clothing through a series of operations like cutting, stitching, and finishing.