A sandwich shop observes that when it increases the price of a sandwich,total revenue from sandwich sales increases,and when they lower the price of a sandwich,total revenue from sandwich sales decreases.This suggests that
A) the demand for sandwiches is inelastic.
B) the demand for sandwiches is elastic.
C) there are many good substitutes for sandwiches.
D) the law of demand is being violated.

Question

Quizplus · Accepted Answer

When the price of a product increases and total revenue also increases, it suggests that the demand for the product is inelastic. This means consumers continue to buy the product despite the price increase, indicating a lower sensitivity to price changes.

A Sandwich Shop Observes That When It Increases the Price