If demand is inelastic and the price falls, the total revenue
A) might rise, fall or remain constant.
B) rises.
C) remains constant.
D) falls.
E) becomes negative.

Question

Quizplus · Accepted Answer

If demand is inelastic, it means that a change in price will result in a proportionately smaller change in quantity demanded. Therefore, if the price falls, the increase in quantity demanded will not be enough to offset the decrease in price, resulting in a decrease in total revenue.

If Demand Is Inelastic and the Price Falls, the Total