Figure 5-4
-Refer to Figure 5-4.If the price increases in the region of the demand curve between points B and C,we can expect total revenue to
A)increase.
B)stay the same.
C)decrease.
D)first decrease,then increase until total revenue is maximized.

Question

Figure 5-4 
-Refer to Figure 5-4.If the price increases in the region of the demand curve between points B and C,we can expect total revenue to
A)increase. 
B)stay the same. 
C)decrease. 
D)first decrease,then increase until total revenue is maximized.

Quizplus · Accepted Answer

This is the area of the demand curve where price elasticity of demand is high. As price increases, quantity demanded decreases significantly, causing total revenue to decrease. Therefore, we can expect total revenue to decrease if the price increases in this region of the demand curve between B and C.

Figure 5-4 -Refer to Figure 5-4.If the Price Increases in the Region