Asked by Chris Huynh on Jun 24, 2024
Verified
Which statement is NOT true regarding a price-elastic demand curve?
A) Total revenue increases when the price falls.
B) The absolute value of the price elasticity is a fraction greater than 0 but less than 1.
C) The absolute value of the price elasticity is greater than 1.
D) The percent changes in the quantity demanded exceed the percent changes in the price for any small change in price.
Price-elastic Demand
A situation where the quantity demanded of a good or service significantly changes in response to changes in its price.
Total Revenue
Total revenue is the total amount of money received by a company from sales of its goods or services before any expenses are subtracted.
- Discriminate among elastic, inelastic, and unit-elastic forms of demand.
Verified Answer
XO
xiang ouyangJul 01, 2024
Final Answer :
B
Explanation :
A price-elastic demand curve means that the absolute value of the price elasticity is greater than 1, indicating that the percent changes in quantity demanded are greater than the percent changes in price. Therefore, statement B, which suggests that the absolute value of the price elasticity is a fraction greater than 0 but less than 1 (indicating inelastic demand), is not true for a price-elastic demand curve.
Learning Objectives
- Discriminate among elastic, inelastic, and unit-elastic forms of demand.