According to the total revenue test, a price cut increases total revenue if demand is
A) inelastic.
B) perfectly inelastic.
C) elastic.
D) unit elastic.

Name: According to the total revenue test, a price cut increases total revenue if demand is A) inelastic. B) perfectly inelastic. C) elastic. D) unit elastic.
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Question

Quizplus · Accepted Answer

When demand is elastic, a decrease in price leads to a proportionally larger increase in quantity demanded, thus increasing total revenue.

According to the Total Revenue Test, a Price Cut Increases