If the demand for its good or service is elastic,a monopoly's
A)total revenue is unchanged when the firm lowers its price.
B)total revenue decreases when the firm lowers its price.
C)marginal revenue is positive.
D)marginal revenue is zero.
E)marginal revenue is negative.

Question

Quizplus · Accepted Answer

When demand is elastic, lowering the price increases the quantity sold by a proportion greater than the decrease in price, leading to an increase in total revenue. This implies that the additional revenue gained from selling one more unit (marginal revenue) is positive.

If the Demand for Its Good or Service Is Elastic,a