At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that
A) there are more people who like vanilla ice cream than there are people who like chocolate ice cream.
B) the demand for chocolate ice cream is inelastic.
C) the demand for chocolate ice cream is elastic.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The decrease in total revenue despite a price reduction indicates that the demand is inelastic, meaning consumers are not significantly increasing their quantity demanded in response to the price drop.

At a Local Ice Cream Parlor, When the Price of Half-Gallons