Figure 5-2

-Refer to Figure 5-2. If the price decreases in the region of the demand curve between points B to A, we can expect total revenue to
A)decrease.
B)stay the same.
C)increase.
D)first decrease, then increase until total revenue is maximized.

Question

Figure 5-2
  ​
-Refer to Figure 5-2. If the price decreases in the region of the demand curve between points B to A, we can expect total revenue to
A)decrease. 
B)stay the same. 
C)increase. 
D)first decrease, then increase until total revenue is maximized.

Quizplus · Accepted Answer

When the price decreases in the region of the demand curve between points B to A, the quantity demanded will increase. However, the decrease in price will outweigh the increase in quantity demanded, resulting in a decrease in total revenue.

Figure 5-2 ​

Figure 5-2