Consider the demand curve illustrated in the figure to the right. Is demand elastic or inelastic? A. Demand is inelastic (at all prices). B. Demand is elastic (at all prices). C. Demand is inelastic at all prices above \( \$ 9.00 \) and elastic at all prices below \( \$ 9.00 \). D. Demand is elastic at all prices above \( \$ 9.00 \) and inelastic at all prices below \( \$ 9.00 \). E. Demand is elastic at all prices above \( \$ 11.00 \) and inelastic at all prices below \( \$ 11.00 \). At what price is total revenue maximized? Total revenue is maximized when price equals \( \$ \square \). (Enter your response as a real number rounded to two decimal places.)

Understanding how demand responds to price changes can be illuminated by the concept of elasticity. When demand is elastic, a small change in price results in a large change in quantity demanded, generally occurring at higher price points where consumers are more sensitive to price changes. Conversely, inelastic demand reflects a situation where price changes have minimal effect on quantity demanded, often seen at lower prices. In terms of application, businesses can leverage this knowledge to optimize pricing strategies. For example, if a product has elastic demand above a certain price, a small decrease in price could lead to increased sales volume, boosting total revenue. Conversely, if demand becomes inelastic at lower prices, businesses may opt to increase prices slightly without fearing a significant drop in sales, thus maximizing their revenue.