Holding all other forces constant,if decreasing the price of a good leads to a decrease in total revenue,then the demand for the good must be
A)unit elastic.
B)inelastic.
C)elastic.
D)None of the above is correct because a price decrease never leads to an decrease in total revenue.

Question

Quizplus · Accepted Answer

If decreasing the price of a good leads to a decrease in total revenue, the demand for the good is inelastic. This means that the percentage decrease in price is greater than the percentage increase in quantity demanded, resulting in lower total revenue.

Holding All Other Forces Constant,if Decreasing the Price of a Good