Demand is said to be inelastic when
A)an increase in price results in a reduction in total revenue.
B)a reduction in price results in an increase in total revenue.
C)a reduction in price results in a decrease in total revenue.
D)the elasticity coefficient exceeds one.

Question

Quizplus · Accepted Answer

When demand is inelastic, a reduction in price leads to a decrease in total revenue because the percentage decrease in price is greater than the percentage increase in quantity demanded, resulting in less overall revenue.

Demand Is Said to Be Inelastic When