If an increase in the price of a good has no impact on the total revenue in that market, demand must be
A) perfectly elastic
B) price inelastic.
C) unit price elastic.
D) price elastic.

Question

Quizplus · Accepted Answer

If an increase in the price of a good has no impact on the total revenue in that market, the demand must be unit price elastic. This means that the percentage change in quantity demanded is equal to the percentage change in price, resulting in no change in total revenue. In contrast, if demand were perfectly elastic, a price increase would cause total revenue to decrease, while in price inelastic demand, a price increase would result in an increase in total revenue. If demand were price elastic, a small increase in price would lead to a large decrease in quantity demanded, resulting in a decrease in total revenue.

If an Increase in the Price of a Good Has