Ceteris paribus,an increase in price will most likely decrease total revenue if the price elasticity of demand is 1.8.

Question

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If the price elasticity of demand is 1.8, it means that for every 1% increase in price, the quantity demanded will decrease by 1.8%. Therefore, if the price is increased, the decrease in quantity demanded will be proportionally greater than the increase in price, resulting in a decrease in total revenue (price x quantity). Thus, an increase in price will most likely decrease total revenue if the price elasticity of demand is 1.8.

Ceteris Paribus,an Increase in Price Will Most Likely Decrease Total