If the seller of good X raises the price of good X, it follows that the total revenue of good X will __________, if demand is __________.
A)rise; inelastic
B)rise; elastic
C)fall; unit elastic
D)fall; elastic
E)a and d

Question

Quizplus · Accepted Answer

When demand is inelastic, a price increase leads to a smaller percentage decrease in quantity demanded, thus increasing total revenue. Conversely, if demand is elastic, a price increase causes a larger percentage decrease in quantity demanded, reducing total revenue.

If the Seller of Good X Raises the Price of Good