Refer to the Above Graph

Refer to the above graph. Consider a situation where price decreases from P₂ to P₁. In this price range, demand is relatively

A) inelastic because the loss in total revenue (areas D + G + I + J) is greater than the gain in total revenue (areas C + F + H) .
B) elastic because the loss in total revenue (areas C + F + H) is greater than the gain in total revenue (area J) .
C) elastic because the loss in total revenue (area J) is less than the gain in total revenue (areas C + F + H) .
D) inelastic because the gain in total revenue (area J) is less than the loss in total revenue (areas C + F + H) .

Correct Answer:

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