When a firm raises the price of its product, what happens to its total revenue?
A) If demand is elastic, total revenue decreases.
B) If demand is elastic, total revenue increases.
C) If demand is unit elastic, total revenue increases.
D) If demand is inelastic, total revenue decreases.
E) If demand is unit elastic, total revenue decreases.

Question

Quizplus · Accepted Answer

If demand is elastic, an increase in price will lead to a proportionately larger decrease in quantity demanded, resulting in a decrease in total revenue.

When a Firm Raises the Price of Its Product, What