Holding all other forces constant,if decreasing the price of a good leads to a decrease in total revenue,then the demand for the good must be
A) unit elastic.
B) inelastic.
C) elastic.
D) None of the above is correct,since a price increase always leads to an increase in total revenue.

Question

Quizplus · Accepted Answer

If decreasing the price of a good leads to a decrease in total revenue, the demand for the good is inelastic. This is because the percentage decrease in price results in a smaller percentage increase in quantity demanded, leading to a decrease in total revenue.

Holding All Other Forces Constant,if Decreasing the Price of a Good