When demand is inelastic,a decrease in price will cause
A)an increase in total revenue.
B)a decrease in total revenue.
C)no change in total revenue but an increase in quantity demanded.
D)no change in total revenue but a decrease in quantity demanded.

Question

Quizplus · Accepted Answer

When demand is inelastic, a decrease in price will result in a proportionally smaller increase in quantity demanded. Therefore, the decrease in price will not be enough to offset the reduction in overall revenue due to the lower price level. As a result, total revenue will decrease.

When Demand Is Inelastic,a Decrease in Price Will Cause