If elasticity of demand is greater than 1:
A) a rise in price lowers total revenue.
B) a decline in price will not change total revenue.
C) a rise in price increases total revenue.
D) a decline in price lowers total revenue.

Question

Quizplus · Accepted Answer

When elasticity of demand is greater than 1, demand is elastic, meaning consumers are sensitive to price changes. Therefore, a rise in price will lead to a proportionally larger decrease in quantity demanded, lowering total revenue.

If Elasticity of Demand Is Greater Than 1