If elasticity of demand is 4 and price is raised,
A)total revenue will fall.
B)total revenue will rise.
C)total revenue will remain constant.
D)there is no way to determine whether total revenue will rise,fall,or remain constant.

Question

Quizplus · Accepted Answer

If elasticity of demand is 4, it means that a 1% increase in price will lead to a 4% decrease in quantity demanded. Therefore, when the price is raised, the decrease in quantity demanded will be relatively larger, resulting in a decrease in total revenue.

If Elasticity of Demand Is 4 and Price Is Raised