When demand is elastic, a decrease in price will
A) decrease total revenue.
B) not change total revenue.
C) increase total revenue.
D) reduce quantity demanded.

Question

Quizplus · Accepted Answer

When demand is elastic, a decrease in price will result in a proportionally larger increase in quantity demanded, thus leading to an increase in total revenue. This is because the increase in quantity demanded would make up for the decrease in price, leading to higher sales and revenue. Therefore, option C is the correct choice.

When Demand Is Elastic, a Decrease in Price Will