The relationships between elasticity and total revenue hold because
A)total revenue equals price divided by quantity demanded.
B)total revenue equals price times quantity demanded.
C)a drop in price has two opposing effects on the two components of the formula.
D)both b and c are true.

Question

Quizplus · Accepted Answer

Total revenue is calculated as price times quantity demanded, and a change in price affects total revenue through both the price and quantity components, which is why both B and C are correct.

The Relationships Between Elasticity and Total Revenue Hold Because