A technological breakthrough lowers the cost of photocopiers. If the demand for photocopiers is price inelastic, we predict that photocopier sales
A)fall and total revenue increases.
B)fall and total revenue decreases.
C)rise and total revenue increases.
D)rise and total revenue decreases.
E)rise, but changes in total revenue will depend on elasticity of supply.

Question

Quizplus · Accepted Answer

When demand is price inelastic, a decrease in price leads to a smaller percentage increase in quantity demanded, causing total revenue to decrease.

A Technological Breakthrough Lowers the Cost of Photocopiers