Under which of the following situations will total revenue rise? A)If elasticity is 1 and price falls. B)If elasticity is 1 and price rises. C)If elasticity is

Question

Under which of the following situations will total revenue rise?
A)If elasticity is > 1 and price falls.
B)If elasticity is > 1 and price rises.
C)If elasticity is < 1 and price falls.
D)If elasticity is = 1 and price falls.

Quizplus · Accepted Answer

When elasticity is greater than one (meaning demand is elastic), a decrease in price will lead to a proportionally larger increase in quantity demanded, resulting in an overall increase in total revenue.

Under Which of the Following Situations Will Total Revenue Rise