A grocery store put salt on sale but found that total revenues fell.This can be explained by which of the following?
A)The demand for salt is very elastic.
B)The demand curve for salt is vertical.
C)The demand for salt is inelastic.

Question

Quizplus · Accepted Answer

If the total revenues fell after putting salt on sale, it suggests that the quantity demanded did not increase enough to offset the decrease in price. This would happen if the demand for salt is inelastic, meaning that consumers are not very responsive to changes in price. If the demand for salt were very elastic, the decrease in price should have led to an overall increase in revenues. If the demand curve for salt were vertical, then any change in price would result in no change in quantity demanded, which is not consistent with the observation that revenues fell.

A Grocery Store Put Salt on Sale but Found That