If demand is price inelastic, a change in price in either direction (up or down) causes:
A) a change in total revenue in the opposite direction.
B) a change in total revenue in the same direction.
C) an increase in total revenue.
D) a decrease in total revenue.

Question

Quizplus · Accepted Answer

When demand is price inelastic, a change in price leads to a less than proportionate change in quantity demanded. Therefore, if the price increases, total revenue increases, and if the price decreases, total revenue decreases. This means the change in total revenue moves in the same direction as the change in price.

If Demand Is Price Inelastic, a Change in Price in Either