When the demand is ________,an increase in price will decrease the total revenue.
A) Elastic
B) Inelastic
C) Contracted
D) Expanded

Question

Quizplus · Accepted Answer

When demand is elastic, this means that a change in price will have a significant impact on the quantity demanded. In this case, if the price were to increase, consumers may switch to a substitute product or reduce their overall quantity demanded, leading to a decrease in total revenue. On the other hand, if the price were to decrease, consumers may be incentivized to buy more, leading to an increase in total revenue. Therefore, an increase in price will decrease total revenue when demand is elastic.

When the Demand Is ________,An Increase in Price Will Decrease