If an increase in the price of a good results in an increase in total revenue for the firm,what must the supply of the good be
A)unit elastic
B)inelastic
C)elastic
D)perfectly elastic

Question

Quizplus · Accepted Answer

If an increase in price leads to an increase in total revenue, it means that the demand for the product is inelastic. In this case, the firm can increase the price without losing too many customers, and therefore total revenue will increase. If the supply were elastic, then an increase in price would lead to a decrease in total revenue. Therefore, the best choice is B - inelastic supply.

If an Increase in the Price of a Good Results