The following question is on a quiz at Marginal Revolution University: https://mru.org/practice-questions/calculating-elasticity-demand-practice-questions
The elasticity of demand is 2.0. Is the demand curve relatively steep or flat? Will a fall in price raise total revenue or lower it? Note: we present the elasticity in terms of its absolute value.
The official answer is "relatively flat; raise total revenue".
I can't understand this; isn't it true that elasticity > 1 means higher responsiveness of demand to changes in price? And isn't 1.0 defined as neither steep nor flat, and anything above 1.0 being steeper?
I can understand that a fall in price will lead to a huge surge in demand, because of the high elasticity, and therefore more profits.
I missed another question on the quiz that, for me, should be explicable in terms of the same reasoning as above.
The elasticity of demand is 1.1. Is the demand curve relatively steep or flat? Will a fall in price raise total revenue or lower it? Note: we present the elasticity in terms of its absolute value.
Again, the official answer is "relatively flat; raise total revenue".