Ceteris paribus,in which of the following instances will total revenue decline?
A) Price rises and demand is inelastic.
B) Price rises and demand is elastic.
C) Price falls and demand is elastic.
D) Price falls and demand is unitary elastic.

Question

Quizplus · Accepted Answer

If price rises and demand is elastic, then a small increase in price will result in a relatively large decrease in quantity demanded. As a result, the total revenue will decline. This is because the decrease in the quantity sold will not be offset by the increase in price, resulting in a net decrease in total revenue.

Ceteris Paribus,in Which of the Following Instances Will Total Revenue