When the quantity effect outweighs the price effect, a price _____ will cause a(n) _____ in total revenue.
A) increase; decrease
B) increase; increase
C) decrease; decrease
D) All of these could occur.

Question

Quizplus · Accepted Answer

When the quantity effect outweighs the price effect, a price increase will lead to a decrease in total revenue because the loss in revenue from selling fewer units is greater than the gain from the higher price per unit.

When the Quantity Effect Outweighs the Price Effect, a Price