If an increase in prices decreases total revenue in the short run, what will it do to total revenue in the long run?
A)It will decrease total revenue in the long run.
B)It will increase total revenue in the long run.
C)It will leave total revenue unchanged in the long run.
D)Any of the above results are possible in the long run.

Question

If an increase in prices decreases total revenue in the short run, what will it do to total revenue in the long run?
A)​It will decrease total revenue in the long run.
B)​It will increase total revenue in the long run.
C)​It will leave total revenue unchanged in the long run.
D)​Any of the above results are possible in the long run.

Quizplus · Accepted Answer

In the long run, firms can adjust their production levels and potentially find ways to lower their costs. This means that they may be able to reduce prices while still making a profit, which could result in an increase in total revenue. However, if prices remain high in the long run, consumers may seek out alternative products or substitute goods, causing total revenue to ultimately decrease. Therefore, it is likely that an increase in prices will decrease total revenue in the long run.

If an Increase in Prices Decreases Total Revenue in the Short