If a firm lowered the price of the product it sells and found that total revenue did not change, then what is true about the demand for its product?
A)It is perfectly inelastic.
B)It is perfectly elastic.
C)It is unit-elastic.
D)It is relatively elastic.

Question

Quizplus · Accepted Answer

If a firm lowers the price of its product and total revenue remains the same, it means that the percentage increase in quantity demanded is the same as the percentage decrease in price. This scenario is only possible when the demand for the product is unit-elastic. In other words, a 1% decrease in price leads to a 1% increase in quantity demanded, resulting in a constant total revenue.

If a Firm Lowered the Price of the Product It