If a firm's total revenue DECREASES when the price of its product is reduced from $80 to $40, the demand for this product between these two prices is:
A) unitary elastic.
B) inelastic.
C) elastic.
D) Cannot tell from what is given.

Question

Quizplus · Accepted Answer

When total revenue decreases as price decreases, it indicates that the demand is inelastic. This means that the percentage decrease in price leads to a smaller percentage increase in quantity demanded, resulting in a decrease in total revenue.

If a Firm's Total Revenue DECREASES When the Price of Its