A price decrease will cause total revenue to fall if
A)Demand is elastic.
B)Demand is inelastic.
C)Demand is unitary elastic.
D)The price elasticity of demand is less than zero.

Question

Quizplus · Accepted Answer

When demand is inelastic, a price decrease will cause total revenue to fall because consumers are not very responsive to price changes, so the decrease in price does not lead to a proportionally larger increase in quantity demanded.

A Price Decrease Will Cause Total Revenue to Fall If