If demand is price elastic,a decrease in price results in a(n)
A)decrease in total expenditure on the good
B)unfavorable shift in tastes and preferences
C)decrease in total cost for the seller
D)increase in supply of the good
E)increase in total revenue to the seller

Question

Quizplus · Accepted Answer

If demand is price elastic, a decrease in price will result in a proportionally larger increase in quantity demanded, leading to an increase in total revenue for the seller. This is because the increase in sales volume from the lower price more than offsets the decrease in revenue per unit. So, the best choice is E, increase in total revenue to the seller.

If Demand Is Price Elastic,a Decrease in Price Results in A(n)