If price falls by 10 percent, total revenue
A)rises if quantity demanded changes by 10 percent.
B)rises if quantity demanded does not change.
C)rises if quantity demanded changes by less than 10 percent.
D)falls if quantity demanded changes by 10 percent.
E)falls if quantity demanded changes by less than 10 percent.

Question

Quizplus · Accepted Answer

If price falls by 10 percent and quantity demanded changes by less than 10 percent, total revenue falls because the percentage decrease in price outweighs the percentage increase in quantity demanded, leading to a net decrease in total revenue.

If Price Falls by 10 Percent, Total Revenue