If a monopolist lowers its price and its demand is inelastic, then its
A) total revenue increases.
B) total revenue decreases.
C) total revenue does not change.
D) total revenue is negative.

Question

Quizplus · Accepted Answer

When demand is inelastic, lowering the price leads to a proportionally smaller increase in quantity demanded, resulting in a decrease in total revenue.

If a Monopolist Lowers Its Price and Its Demand Is