Suppose that Nisshodo's Mochi shop raises the price of its mochi by 10% and its total revenue increased. This would mean that the demand for mochi is
A) inelastic.
B) elastic.
C) unitary elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

When the price of a good increases and total revenue also increases, it indicates that the demand for the good is inelastic. This means that the percentage change in quantity demanded is less than the percentage change in price, leading to an increase in total revenue despite the higher price.

Suppose That Nisshodo's Mochi Shop Raises the Price of Its