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WAEC Economics 2023 Question 9

Question 9

Elasticity

A fall in the price of a normal commodity which has elastic demand will result in

  1. A.a fall in quantity demanded.
  2. B.an increase in revenue.
  3. C.a fall in demand.
  4. D.a decrease in revenue.
Show the answer and explanation

Answer: B (an increase in revenue.)

Explanation

Quantity rises by a larger percentage than price falls, so revenue rises.