If demand is price elastic, then when price decreases, total revenue:
A) decreases.
B) increases.
C) does not change.
D) is less than one.
E) is negative.

Question

Quizplus · Accepted Answer

When demand is price elastic, a decrease in price will lead to a proportionately larger increase in quantity demanded, resulting in an overall increase in total revenue. This is because the increase in quantity demanded outweighs the decrease in price, resulting in a net gain in revenue.

If Demand Is Price Elastic, Then When Price Decreases, Total