If total revenue goes up when price falls, the price elasticity of demand is said to be:
A) price inelastic.
B) unit price elastic.
C) price elastic.
D) positive.

Question

Quizplus · Accepted Answer

When total revenue (TR) increases with a decrease in price, it means that the demand is responsive to the change in price, i.e., the price elasticity of demand (PED) is greater than 1. This is referred to as price elasticity or price-sensitive demand. Therefore, the correct answer is (C) price elastic.

If Total Revenue Goes Up When Price Falls, the Price