If the demand for new cars is elastic, an increase in price will result in
A) an increase in profits.
B) an increase in total revenue.
C) a decrease in total revenue.
D) an increase in the quantity demanded.

Question

Quizplus · Accepted Answer

If the demand for new cars is elastic, it means that consumers are sensitive to changes in price and will decrease their quantity demanded if the price increases. Therefore, an increase in price will result in a decrease in total revenue, as the increase in price will not be sufficient to offset the decrease in quantity demanded.

If the Demand for New Cars Is Elastic, an Increase