If price and total revenue are directly related, demand is inelastic.

Question

Quizplus · Accepted Answer

If price and total revenue are directly related, it means that an increase in price leads to an increase in total revenue, indicating that the demand is relatively insensitive to price changes or inelastic. On the other hand, if price and total revenue are inversely related, an increase in price leads to a decrease in total revenue, indicating that the demand is relatively sensitive to price changes or elastic.

If Price and Total Revenue Are Directly Related, Demand Is