Ceteris paribus,a price decrease will cause total revenue to decrease for a firm,if the demand for its product is:
A) Unitary elastic.
B) Inelastic.
C) Elastic.
D) Increasing rapidly.

Question

Quizplus · Accepted Answer

When demand is inelastic, a decrease in price leads to a proportionally smaller increase in quantity demanded, resulting in a decrease in total revenue.

Ceteris Paribus,a Price Decrease Will Cause Total Revenue to Decrease