When the price of softballs is high,a ________ in price will raise total revenue.When the price is low,the seller should ________ the price to increase total revenue.
A) decrease; raise
B) rise; raise
C) decrease; decrease
D) rise; decrease
E) decrease; not change

Question

Quizplus · Accepted Answer

This is based on the concept of price elasticity of demand. When the price of softballs is high and demand is elastic, a decrease in price will lead to a proportionally larger increase in quantity demanded, raising total revenue. Conversely, when the price is low and demand is inelastic, raising the price will lead to a smaller proportionate decrease in quantity demanded, also increasing total revenue.

When the Price of Softballs Is High,a ________ in Price