When demand is perfectly inelastic, an increase in price will
A) leave total revenue unchanged.
B) increase total revenue.
C) decrease total revenue.
D) either increase total revenue or decrease total revenue, but it is impossible to tell which.

Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, it means that the quantity demanded does not change regardless of the price change. Therefore, an increase in price will lead to an increase in total revenue because the same quantity is sold at a higher price.

When Demand Is Perfectly Inelastic, an Increase in Price Will