Which of the following concerning the relationship between elasticity and total revenue is true?
A) Price elasticity and total revenue are not related.
B) When demand for a good is unit elastic, any price change within the unit elastic price range changes total revenue by one.
C) When demand for a good is price inelastic, total revenue increases when price increases.
D) When demand for a good is price elastic, total revenue increases when price increases.
E) Total revenue is maximized when the price elasticity of demand is zero.

Question

Quizplus · Accepted Answer

When demand for a good is price inelastic, an increase in price leads to a less than proportionate decrease in quantity demanded, which results in an increase in total revenue.

Which of the Following Concerning the Relationship Between Elasticity and Total