When the price of milk increases,total revenue increases for milk retailers.From this information,we can conclude that
A) the law of demand does not hold.
B) the demand for milk is inelastic.
C) the supply of milk is inelastic.
D) corporations are greedy.

Question

Quizplus · Accepted Answer

If the total revenue of milk retailers increases when the price of milk increases, it means that the demand for milk is inelastic. This is because even though the price of milk has increased, consumers are still willing to pay for it, which suggests that milk is a necessary good for them. If the demand for milk was elastic, then an increase in price would lead to a decrease in demand, and the total revenue of milk retailers would decrease.

When the Price of Milk Increases,total Revenue Increases for Milk