Along the elastic range of a demand curve, a decrease in price causes:
A) no change in total revenue.
B) a decrease in total revenue.
C) an increase in total revenue.
D) an unpredictable change in total revenue.

Question

Quizplus · Accepted Answer

Along the elastic range of a demand curve, a decrease in price causes an increase in quantity demanded, which leads to an increase in total revenue. This is because the increase in quantity demanded at the lower price outweighs the decrease in price per unit, resulting in a higher total revenue.

Along the Elastic Range of a Demand Curve, a Decrease