In the elastic portion of a linear demand curve, firm revenue ______ when price falls.
A) increases
B) decreases
C) remains the same
D) changes in an indeterminate direction

Question

Quizplus · Accepted Answer

In the elastic portion of a linear demand curve, a decrease in price will lead to a greater increase in quantity demanded, resulting in an increase in total revenue for the firm. Therefore, the best answer is A, which indicates that revenue increases when price falls.

In the Elastic Portion of a Linear Demand Curve, Firm