After a price decrease,the quantity effect tends to:
A)decrease total revenue.
B)increase total revenue.
C)make the price effect stronger.
D)make the price effect weaker.

Question

Quizplus · Accepted Answer

The quantity effect refers to the increase in demand that comes with a price decrease. This increase in quantity sold can offset the decrease in price and result in an overall increase in total revenue. Therefore, after a price decrease, the quantity effect tends to increase total revenue.

After a Price Decrease,the Quantity Effect Tends To