Whenever a product is put on special sale at a discounted price, total revenue from the product increases. This indicates that the coefficient of elasticity for the product is greater than 1.

Question

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If the total revenue increases when the price is reduced, it indicates that the demand is elastic, meaning the percentage change in quantity demanded is greater than the percentage change in price, thus the elasticity coefficient is greater than 1.

Whenever a Product Is Put on Special Sale at a Discounted