If a product has an inelastic demand and the manufacturer raises its price,
A) total revenue will increase.
B) quantity demanded will decrease.
C) the demand schedule will shift.
D) the demand will become more inelastic.
E) total revenue will decrease.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are less sensitive to price changes, so an increase in price leads to a smaller percentage decrease in quantity demanded, resulting in higher total revenue.

If a Product Has an Inelastic Demand and the Manufacturer