A product has an inelastic demand if
A) price falls and total revenue (or total consumer expenditures) rises.
B) price rises and total revenue (or total consumer expenditures) falls.
C) price rises and total revenue (or total consumer expenditures) rises.
D) its slope is less than 1.
E) price changes and there is no change in total revenue (or total consumer expenditures).

Question

Quizplus · Accepted Answer

When demand is inelastic, a price increase leads to a rise in total revenue because the percentage decrease in quantity demanded is less than the percentage increase in price.

A Product Has an Inelastic Demand If