What can be concluded if a firm sells 3,000 units at $10 per unit and 5,000 units at $8?

When a firm sells different quantities at different prices, it's important to analyze how changes in price affect the quantity demanded. In this scenario, the firm sells 3,000 units at $10 per unit and 5,000 units at $8 per unit. By examining these figures, it can be concluded that demand is elastic within this price range.

Elastic demand means that a small change in price leads to a larger percentage change in the quantity demanded. In this case, the price drops from $10 to $8, which is a 20% decrease in price. The quantity demanded increases from 3,000 to 5,000 units, which is an increase of approximately 66.67% (calculated as [5,000 - 3,000] / 3,000 = 2,000 / 3,000). The significant rise in quantity demanded relative to the price decrease indicates that consumers are very responsive to price changes—characteristic of elastic demand.

This strong response of quantity demanded to a price change confirms that demand in this scenario is elastic, which supports the conclusion that option A is the correct answer. Understanding this relationship helps firms make informed pricing decisions to optimize revenue and market strategies.