If the U.S. Postal Service increases the price of first-class mail delivery and its total revenue increases, the demand curve for first-class mail delivery must be
A) relatively elastic
B) relatively inelastic
C) perfectly elastic
D) perfectly inelastic

Question

Quizplus · Accepted Answer

When demand is relatively inelastic, an increase in price does not significantly reduce the quantity demanded, allowing total revenue to increase. This is because consumers are less sensitive to price changes for inelastic goods or services.

If the US Postal Service Increases the Price of First-Class Mail Delivery