Total revenue from the sale of a good decreases if
A)income increases and the good is a normal good.
B)its price rises and demand is elastic.
C)its price rises and demand is inelastic.
D)income falls and the good is an inferior good.
E)its price falls and demand is elastic.

Question

Quizplus · Accepted Answer

According to the law of demand, when the price of a good increases, the quantity demanded decreases. If the demand for the good is elastic, this decrease in quantity demanded will be proportionally greater than the increase in price, leading to a decrease in total revenue.

Total Revenue from the Sale of a Good Decreases If