In which of the following cases will total revenue increase?
A)Price falls and demand is inelastic.
B)Price falls and supply is elastic.
C)Price rises and demand is inelastic.
D)Price rises and demand is elastic.

Question

Quizplus · Accepted Answer

Total revenue increases when price rises and demand is inelastic because consumers are relatively unresponsive to price changes, leading to a smaller percentage decrease in quantity demanded than the percentage increase in price, thus increasing total revenue.

In Which of the Following Cases Will Total Revenue Increase