If the firm in the diagram lowers price from P ₁ to P ₂, it will
A)lose P₁ P₂ ba in revenue from the price cut but increase revenue by Q₁ bcQ₂ from the increase in sales.
B)lose P₁ P₂ ca in revenue from the price cut but increase revenue by Q₁ acQ₂ from the increase in sales.
C)incur a decline in total revenue because it is operating on the elastic segment of the demand curve.
D)incur an increase in total revenue because it is operating on the inelastic segment of the demand curve.

Question

If the firm in the diagram lowers price from P ₁ to P ₂, it will
A)lose P₁ P₂ ba in revenue from the price cut but increase revenue by Q₁ bcQ₂ from the increase in sales. 
B)lose P₁ P₂ ca in revenue from the price cut but increase revenue by Q₁ acQ₂ from the increase in sales. 
C)incur a decline in total revenue because it is operating on the elastic segment of the demand curve. 
D)incur an increase in total revenue because it is operating on the inelastic segment of the demand curve.

Quizplus · Accepted Answer

The Answer of  If the firm in the diagram lowers price from P ₁ to P ₂, it will
A)lose P₁ P₂ ba in revenue from the price cut but increase revenue by Q₁ bcQ₂ from the increase in sales. 
B)lose P₁ P₂ ca in revenue from the price cut but increase revenue by Q₁ acQ₂ from the increase in sales. 
C)incur a decline in total revenue because it is operating on the elastic segment of the demand curve. 
D)incur an increase in total revenue because it is operating on the inelastic segment of the demand curve.

If the Firm in the Diagram Lowers Price from P