passwella.
Menu

JAMB Economics 1998 Question 16

Question 16

Elasticity

If an increase in the price of a commodity leads to increase in total revenue, then it means that the demand for this commodity is

  1. A.normal
  2. B.elastic
  3. C.inelastic
  4. D.abnormal.
Show the answer and explanation

Answer: C (inelastic)

Explanation

If raising the price raises total revenue, quantity fell by a smaller percentage than price rose, so demand is inelastic.