Elastic demand exists when:

A. a small percentage decrease in price produces a smaller percentage increase in g demanded and total revenue falls.
B. a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
C. An increase in price causes a larger increase in quantity demanded and total revenue falls to zero. unchanged. demanded and total revenue increases.
D. the quantity demanded remains the same regardless of level of price and total revenue is
E. a small percentage decrease in price produces a smaller percentage decrease in quantity

Question

20-04-2020
Business

contestada

Elastic demand exists when:

A. a small percentage decrease in price produces a smaller percentage increase in g demanded and total revenue falls.
B. a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
C. An increase in price causes a larger increase in quantity demanded and total revenue falls to zero. unchanged. demanded and total revenue increases.
D. the quantity demanded remains the same regardless of level of price and total revenue is
E. a small percentage decrease in price produces a smaller percentage decrease in quantity

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ewomazinoade ewomazinoade · Answer 1 · 2020-04-21T06:56:37+02:00

Answer:

B. a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.

Explanation:

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Elasticity of demand = percentage change in quantity demanded / percentage change in price

Demand is elastic if a small percentage decrease in price produces a larger percentage increase in quantity demanded . Total revenue would increase because the percentage increase in Quanitity demanded exceeds the percentage decrease in price.

If demand is elastic, a small percentage increase in price produces a larger percentage decrease in quantity demanded and total revenue increases.

Here, total revenue falls because percentage decrease in price exceeds the percentage increase in price.

Demand is inelastic if a small percentage decrease in price produces a smaller percentage increasein quantity demanded.

Demand is perfectly inelastic if the quantity demanded remains the same regardless of level of price.

I hope my answer helps you

sohail09753 sohail09753 · Answer 2 · 2021-12-21T14:48:57+01:00

The elasticity is the measurement tool that is variable sensitive for the changes in other variables. When other market factor remains the same or varies there is a proportional change in demand and supply affects the elasticity.

The elastic demand occurs when there is smaller percentage of decrease in price that inversely affects the larger percentage of increase in the quantity demanded and the equal increase in the total revenue.

The elasticity of demand helps in measuring the percentage change in the quantity demanded and the percentage change in the prices.

There is a inverse relationship between the demand and supply. When there is a small decrease in the price of product there will be higher increase in the quantity that will increase the total revenue also.

To know more about elasticity, refer to the link:

https://brainly.com/question/25706924