Along a downward-sloping straight-line demand curve beginning at the price where demand intersects the price axis, as price declines, revenue:
A) declines.
B) rises.
C) declines and then rises.
D) rises and then declines.

Question

Quizplus · Accepted Answer

Along a downward-sloping demand curve, total revenue initially rises as price decreases due to increased quantity sold, but eventually declines as further price reductions lead to smaller increases in quantity demanded, reflecting the inelastic portion of the demand curve.

Along a Downward-Sloping Straight-Line Demand Curve Beginning at the Price