If the elasticity of demand for a service is 0.4 and price is raised,
A)total revenue will fall.
B)total revenue will rise.
C)total revenue will stay the same.
D)there is no way to determine whether total revenue will rise,fall,or remain the same.

Question

Quizplus · Accepted Answer

When the elasticity of demand is less than 1 (inelastic), raising prices leads to an increase in total revenue because the percentage decrease in quantity demanded is less than the percentage increase in price.

If the Elasticity of Demand for a Service Is 0