Demand for a good is inelastic if:
A) total revenue decreases when price decreases.
B) the quantity effect outweighs the price effect of a price increase.
C) the absolute value of price elasticity is greater than 1.
D) None of these are correct.

Question

Quizplus · Accepted Answer

When demand is inelastic, a decrease in price leads to a decrease in total revenue because the percentage change in quantity demanded is less than the percentage change in price.

Demand for a Good Is Inelastic If