When the demand is ________,an increase in price will increase the total revenue.
A) Elastic
B) Inelastic
C) Contracted
D) Expanded

Question

Quizplus · Accepted Answer

When the demand is inelastic, it means that the quantity demanded is not very responsive to changes in price. In this case, an increase in price will lead to increased total revenue for the seller. This is because the increase in revenue from the higher price offsets the decrease in revenue from selling fewer units due to the higher price. On the other hand, if the demand is elastic, an increase in price will lead to a decrease in total revenue, as the decrease in quantity demanded will more than offset the increase in revenue from the higher price.

When the Demand Is ________,An Increase in Price Will Increase