If demand is elastic and price falls, total revenue will increase.

Question

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When demand is elastic, a decrease in price will lead to a proportionately larger increase in quantity demanded. As a result, the increase in quantity demanded will be enough to offset the decrease in price, leading to an increase in total revenue. This is because the percentage increase in quantity demanded is greater than the percentage decrease in price, leading to a net increase in revenue.

If Demand Is Elastic and Price Falls, Total Revenue Will