If a firm's total revenue DECREASES when the price of its product is raised from $50 to $55, the demand for this product between these two prices is:
A) elastic.
B) inelastic.
C) unitary elastic.
D) Cannot tell from what is given.

Question

Quizplus · Accepted Answer

If the total revenue decreases when the price is raised, it means that the increase in price resulted in a decrease in the quantity demanded. In this scenario, the demand is considered elastic because a small change in price resulted in a large change in the quantity demanded, ultimately leading to a decrease in total revenue.

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