If an increase in the price of a good results in an increase in total revenue for the firm, then:
A)the supply of the good must be unit elastic
B)the supply of the good must be inelastic
C)the supply of the good must be elastic
D)nothing can be said about price elasticity of supply from the information given

Question

Quizplus · Accepted Answer

The information given relates to the price elasticity of demand, not supply. An increase in price leading to an increase in total revenue suggests that the demand for the good is inelastic. Elasticity of supply is not addressed by this scenario.

If an Increase in the Price of a Good Results