A decrease in demand will:
A)reduce total revenue.
B)increase total revenue.
C)increase total revenue only if demand is inelastic.
D)increase total revenue only if demand is elastic.

Question

A decrease in demand will:
A)​reduce total revenue.
B)​increase total revenue.
C)​increase total revenue only if demand is inelastic.
D)​increase total revenue only if demand is elastic.

Quizplus · Accepted Answer

When demand decreases, the quantity demanded at each price point will decrease, leading to a decrease in total revenue. This is because there will be fewer customers willing to pay for the product at the current price, resulting in a lower amount of revenue generated.

A Decrease in Demand Will