If the total revenue received by a firm increases when it raises its price, this indicates that the demand for the firm's product is:
A) unstable.
B) price inelastic.
C) price elastic.
D) unit price elastic.

Question

Quizplus · Accepted Answer

When the total revenue received by a firm increases when it raises its price, it suggests that the demand for the firm's product is price inelastic, meaning that the quantity demanded does not decrease proportionately as the price increases. In this case, the increase in revenue from the price increase more than offsets the decrease in quantity demanded.

If the Total Revenue Received by a Firm Increases When