In moving down along a demand curve, total revenue
A)stays constant.
B)increases.
C)may increase, decrease, or stay constant.
D)decreases.
E)is always equal to zero.

Question

Quizplus · Accepted Answer

Total revenue may increase, decrease, or stay constant as one moves down along a demand curve, depending on the price elasticity of demand for the product. If demand is elastic, total revenue increases; if demand is inelastic, total revenue decreases; and if demand is unit elastic, total revenue stays constant.

In Moving Down Along a Demand Curve, Total Revenue