If the price elasticity of demand is elastic, a price increase will actually reduce total revenue.

Name: If the price elasticity of demand is elastic, a price increase will actually reduce total revenue.
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Question

Quizplus · Accepted Answer

When the price elasticity of demand is elastic, a price increase leads to a relatively large decrease in quantity demanded, resulting in a decrease in total revenue. This is because the increase in price cannot compensate for the decrease in quantity demanded, resulting in a net loss of revenue.

If the Price Elasticity of Demand Is Elastic, a Price