When Demand Is Elastic

question 65

Multiple Choice

When demand is elastic,

• A)the percentage change in price is greater than the percentage change in quantity demanded.
• B)price increases raise total revenue.
• C)the buyer is sensitive to changes in price.
• D)the elasticity coefficient is greater than zero,but less than one.

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Definitions:

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at each price point.

Total Cost

Represents the complete cost of production, including both fixed and variable costs, for producing a certain amount of goods or services.

Elastic

Describes a situation in which the supply or demand for a good or service is highly responsive to changes in price.

Excess Capacity

A situation where a firm is producing at a level less than its maximum possible output, leading to unused resources.