Use the figure below to answer the following questions. Figure 4.1.2
-Figure 4.1.2 illustrates a linear demand curve.If the price falls from $13 to $11,
A)total revenue increases.
B)total revenue decreases.
C)total revenue remains unchanged.
D)total revenue initially increases then decreases.
E)total revenue initially decreases then increases.

Question

Use the figure below to answer the following questions.  Figure 4.1.2
-Figure 4.1.2 illustrates a linear demand curve.If the price falls from $13 to $11,
A)total revenue increases. 
B)total revenue decreases. 
C)total revenue remains unchanged. 
D)total revenue initially increases then decreases. 
E)total revenue initially decreases then increases.

Quizplus · Accepted Answer

When the price falls from $13 to $11 along a linear demand curve, total revenue increases because the quantity demanded increases by a proportion greater than the decrease in price, assuming the portion of the demand curve is elastic.

Use the Figure Below to Answer the Following Questions