Total revenue from the sale of a good will decrease if
A)income increases and the good is a normal good.
B)its price rises and demand is elastic.
C)its price rises and demand is inelastic.
D)income falls and the good is an inferior good.
E)its price falls and demand is elastic.

Question

Quizplus · Accepted Answer

According to the law of demand, when the price of a good increases, the quantity demanded decreases. If demand is elastic, consumers are highly responsive to price changes, so a small increase in price will cause a large decrease in quantity demanded. This means that total revenue (price x quantity) will decrease.

Total Revenue from the Sale of a Good Will Decrease