Which of the following is true of a decrease in product prices?
A) The quantity effect always dominates the price effect.
B) The price effect always dominates the quantity effect.
C) When the price effect dominates the quantity effect, total revenue increases.
D) When the quantity effect dominates the price effect, total revenue increases.

Question

Quizplus · Accepted Answer

When the quantity effect dominates the price effect, total revenue increases. This is because the decrease in price leads to an increase in quantity demanded, which can offset the decrease in price and result in an overall increase in total revenue.

Which of the Following Is True of a Decrease in Product