A sandwich shop observes that when it increases the price of a sandwich,total revenue from sandwich sales increases,and when they lower the price of a sandwich,total revenue from taco sales decreases.This suggests:
A)the demand for sandwiches is inelastic.
B)the demand for sandwiches is elastic.
C)there are many good substitutes for sandwiches.
D)the law of demand is being violated.

Question

Quizplus · Accepted Answer

When the price of a sandwich increases and total revenue also increases, it indicates that the demand for sandwiches is inelastic, meaning consumers are not significantly reducing their quantity demanded despite the price increase.

A Sandwich Shop Observes That When It Increases the Price