A decrease in total revenue will result if
A) demand is inelastic and price increases.
B) demand is elastic and price increases.
C) demand is elastic and price decreases.
D) demand is unitary elastic and price decreases.

Question

Quizplus · Accepted Answer

When demand is elastic, a small increase in price will result in a large decrease in quantity demanded, leading to a decrease in total revenue. Therefore, if the price increases and demand is elastic, the total revenue will decrease.

A Decrease in Total Revenue Will Result If