Suppose that the revenue of a product increases when its price decreases. Then demand for the product must
A)be inelastic.
B)be elastic.
C)be unit elastic.
D)be perfectly inelastic
E)have an elasticity equal to 0.

Question

Quizplus · Accepted Answer

If the revenue of a product increases when its price decreases, this means that the demand for the product is elastic. This is because a decrease in price leads to a relatively larger increase in quantity demanded, resulting in a net increase in revenue. Inelastic demand would result in a decrease in revenue when the price decreases.

Suppose That the Revenue of a Product Increases When Its