Suppose a decrease in the supply of paper results in an increase in revenue.This indicates that
A)the demand for paper is inelastic.
B)the demand for paper is elastic.
C)the supply of paper is inelastic.
D)the supply of paper is elastic.

Question

Quizplus · Accepted Answer

When the supply decreases and revenue increases, it indicates that the price increase due to the supply decrease did not significantly reduce the quantity demanded, suggesting that demand is inelastic.

Suppose a Decrease in the Supply of Paper Results in an Increase