An increase in price will result in no change in total revenue if:
A)the percentage change in price is large enough to cause quantity demanded to fall to zero.
B)the coefficient of elasticity is equal to zero.
C)the percentage change in quantity demanded is equal to the percentage change in price (in absolute values).
D)the demand function is perfectly elastic.

Question

Quizplus · Accepted Answer

When the percentage change in quantity demanded is equal to the percentage change in price (in absolute values), the elasticity of demand is unitary, which means that a change in price results in an equal and opposite change in quantity demanded. Therefore, total revenue remains the same.

An Increase in Price Will Result in No Change in Total