If the demand for water is inelastic,then as the price of water falls,quantity demanded of water will ________ and total revenue will ________.
A) increase; increase
B) decrease; increase
C) decrease; decrease
D) increase; decrease

Question

Quizplus · Accepted Answer

If demand for water is inelastic, then a decrease in price will have a proportionately smaller increase in quantity demanded. As a result, the total revenue (price multiplied by quantity) will decrease, since the decrease in price will not be enough to offset the decrease in quantity demanded. Therefore, the correct answer is D.

If the Demand for Water Is Inelastic,then as the Price