A firm increases its price for a good and total revenues increase. From this, we can conclude that its demand is
A) price elastic.
B) price inelastic.
C) unitary elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

When a firm increases its price and total revenues increase, it indicates that the demand for the good is price inelastic. This means that the percentage change in quantity demanded is less than the percentage change in price, leading to an increase in total revenue despite the higher price.

A Firm Increases Its Price for a Good and Total