Refer to Figure 20

question 31

Multiple Choice

Refer to Figure 20.2.If the area 0P₁AB is less than the area 0P₂CD, we can conclude that the price elasticity of demand between point A and point C is

• A) Elastic.
• B) Inelastic.
• C) Unitary elastic.
• D) Impossible to determine. It depends on whether the price has increased or decreased. Lower prices result in higher total revenue (price times quantity) only if demand is elastic.

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Definitions:

Liquidated

Refers to the process of converting assets into cash or using them to pay off liabilities, often in the context of dissolving a business or settling debts.