NECO Economics 2024 Objective — Question 8

Question 8 of 50 from the National Examinations Council (NECO) Economics 2024 Objective paper, with the correct answer and a full explanation.

When total revenue increases as price falls, the coefficient of price elasticity of demand is

A. A. greater than oneCorrect
B. B. one
C. C. less than one
D. D. zero

Explanation

For a commodity whose demand is fairly elastic, an increase in the price of the commodity will result in a decrease in the total revenue of the seller and vice versa. However, the PED is said to be fairly elastic when it is greater than one but less than infinity.

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