If elasticity of demand is less than 1:
A) a rise in price decreases total revenue.
B) a decline in price increases total revenue.
C) a decline in price will not change total revenue.
D) a rise in price increases total revenue.

Question

Quizplus · Accepted Answer

When elasticity of demand is less than 1, demand is inelastic, meaning consumers are not very responsive to price changes. Therefore, a rise in price will increase total revenue.

If Elasticity of Demand Is Less Than 1