A price cut will decrease the revenue a firm receives if the demand for its product is
A)elastic.
B)inelastic.
C)unit elastic.
D)straight elastic.

Question

Quizplus · Accepted Answer

When demand is inelastic, a price cut will decrease the revenue because consumers are not very responsive to price changes, meaning a decrease in price does not lead to a proportionally larger increase in quantity demanded to offset the lower price.

A Price Cut Will Decrease the Revenue a Firm Receives