When the price elasticity of demand is high and prices go up,total ________.
A) revenues stay the same
B) revenues decline
C) revenues increase
D) profits increase

Question

Quizplus · Accepted Answer

When the price elasticity of demand is high, it means consumers are very responsive to changes in price. Therefore, if prices go up, demand will likely decrease significantly, resulting in a decline in total revenues. Profit may also decrease if the decline in revenue is greater than the savings on costs associated with producing and selling fewer goods.

When the Price Elasticity of Demand Is High and Prices