The relationships between elasticity and total revenue hold because:
A)total revenue equals price divided by quantity demanded
B)total revenue equals price times quantity demanded
C)a drop in price has two opposing effects on the two components of the formula
D)both b and c

Question

The relationships between elasticity and total revenue hold because:
A)​total revenue equals price divided by quantity demanded  
B)​total revenue equals price times quantity demanded 
C)​a drop in price has two opposing effects on the two components of the formula 
D)​both b and c

Quizplus · Accepted Answer

Total revenue is calculated as price times quantity demanded (B). A drop in price affects total revenue by increasing quantity demanded, but the overall effect depends on the elasticity of demand (C).

The Relationships Between Elasticity and Total Revenue Hold Because