For an elastic demand function, the derivative of the revenue function with respect to price is:
A) positive.
B) negative.
C) zero.
D) infinite.

Question

Quizplus · Accepted Answer

For an elastic demand function, the derivative of the revenue function with respect to price is negative. This is because, in the case of elastic demand, a price increase leads to a proportionally larger decrease in quantity demanded, causing total revenue to decrease.

For an Elastic Demand Function, the Derivative of the Revenue