Holding all other forces constant,if decreasing the price of a good leads to an increase in total revenue,then the demand for the good must be
A) unit elastic.
B) inelastic.
C) elastic.
D) None of the above is correct because a price increase always leads to an increase in total revenue.

Question

Quizplus · Accepted Answer

When the demand is elastic, a decrease in price leads to a proportionally larger increase in quantity demanded, resulting in an increase in total revenue.

Holding All Other Forces Constant,if Decreasing the Price of a Good