If the demand for a good is price inelastic, a decrease in the price of the good will result in a decrease in the total revenue of a firm producing the good.

Question

Quizplus · Accepted Answer

When demand is price inelastic, the percentage change in quantity demanded is less than the percentage change in price, so a decrease in price leads to a proportionally smaller increase in quantity demanded, resulting in lower total revenue.

If the Demand for a Good Is Price Inelastic, a Decrease