Consider the segment of a demand curve along which all price elasticities of demand are less than 1. A decrease in price anywhere along that segment
A) shifts that segment of the demand curve to the right
B) increases total revenue
C) decreases total revenue
D) shifts that segment of the demand curve to the left
E) raises the price elasticity of demand

Question

Quizplus · Accepted Answer

When the price elasticity of demand is less than 1, the demand is considered inelastic. In this case, a decrease in price leads to a proportionally smaller increase in quantity demanded, which decreases total revenue.

Consider the Segment of a Demand Curve Along Which All