When price rises by 3 percent and quantity demanded changes by 6 percent,
A)total revenue falls 3 percent.
B)total revenue falls by half.
C)total revenue doubles.
D)total revenue does not change.
E)total revenue increases 18 percent.

Question

Quizplus · Accepted Answer

Total revenue changes in the opposite direction of the quantity demanded when price and quantity demanded move in opposite directions, and a 3 percent price increase with a 6 percent decrease in quantity demanded leads to a decrease in total revenue, not an increase or doubling.

When Price Rises by 3 Percent and Quantity Demanded Changes