If total revenue rises as a result of a decrease in the price of a given good, it follows that demand is
A)inelastic.
B)perfectly inelastic.
C)elastic.
D)unit elastic.
E)none of the above

Question

Quizplus · Accepted Answer

When total revenue increases as the price decreases, it indicates that the quantity demanded increases by a larger percentage than the percentage decrease in price, which is a characteristic of elastic demand.

If Total Revenue Rises as a Result of a Decrease