In the inelastic 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 inelastic portion of a linear demand curve, consumers are less responsive to changes in price, which means that a decrease in price will not significantly increase demand. As a result, firm revenue will decrease as price falls since the decrease in price is not offset by a significant increase in demand.

In the Inelastic Portion of a Linear Demand Curve, Firm