The demand for a good is price inelastic if
A)a rise in price results in an increase in total revenue.
B)a rise in price results in a decrease in total revenue.
C)an increase in income results in a decrease in total revenue.
D)an increase in income results in an increase in total revenue.
E)the good is a luxury.

Question

Quizplus · Accepted Answer

If a rise in price results in an increase in total revenue, it means that the change in price did not significantly affect the quantity demanded. This is a characteristic of price inelastic demand.

The Demand for a Good Is Price Inelastic If