If the demand for donuts is inelastic, then an increase in the price of donuts will
A)increase total revenue of donuts sellers.
B)decrease total revenue of donuts sellers.
C)not change total revenue of donuts sellers.
D)change total revenue of donuts sellers but in an unknown way without more information.

Question

Quizplus · Accepted Answer

When demand is inelastic, it means that the quantity demanded does not decrease significantly as the price increases. Therefore, an increase in the price of donuts will lead to an increase in total revenue for donut sellers because the decrease in quantity demanded is proportionally less than the increase in price.

If the Demand for Donuts Is Inelastic, Then an Increase