Which of the following statements is NOT correct?
A) If demand is unitary elastic an increase in the price of a good will not change total revenue.
B) If demand is elastic a higher price will actually decrease total revenue.
C) Total revenue will fall if consumer's response to a price cut is large.
D) If the relative change in price is greater than the relative change in the quantity demanded associated with it,demand is inelastic.

Question

Quizplus · Accepted Answer

Statement C is incorrect because if demand is elastic (meaning consumers' response to a price cut is large), total revenue will actually increase, not fall, as the increase in quantity demanded will more than offset the decrease in price.

Which of the Following Statements Is NOT Correct