If demand is price elastic,a decrease in seller's total revenue would result from a(n)
A)decrease in price
B)increase in quantity demanded
C)increase in price
D)decrease in income for an inferior good
E)increase in total cost to the seller

Question

Quizplus · Accepted Answer

When demand is price elastic, a decrease in price will lead to an increase in quantity demanded that is proportionally greater than the decrease in price, resulting in an increase in total revenue. An increase in price, on the other hand, will lead to a decrease in quantity demanded that is proportionally greater than the increase in price, resulting in a decrease in total revenue.

If Demand Is Price Elastic,a Decrease in Seller's Total Revenue