If the absolute value of the own price elasticity of steak is 0.4, a decrease in price will lead to:
A) a reduction in total revenue.
B) an increase in total revenue.
C) no change in total revenue.
D) None of the statements is correct.

Question

Quizplus · Accepted Answer

The own price elasticity of steak is inelastic (less than 1), meaning that a decrease in price will lead to a proportionally smaller increase in quantity demanded, resulting in a reduction in total revenue.

If the Absolute Value of the Own Price Elasticity of Steak