Other things held constant, when demand is price inelastic, an increase in
A) the price leads to lower total revenue.
B) total revenue means that quality will improve.
C) total revenue leads to a reduction in price.
D) price leads to greater total revenue.

Question

Quizplus · Accepted Answer

When demand is price inelastic, an increase in price leads to a smaller percentage decrease in quantity demanded, resulting in greater total revenue. This is because consumers are less sensitive to price changes, and the decrease in quantity sold is not enough to offset the increase in price.

Other Things Held Constant, When Demand Is Price Inelastic, an Increase