If a price decrease leads to an increase in total revenue, demand must be:
A)perfectly inelastic.
B)relatively inelastic.
C)relatively elastic.
D)unit elastic.

Name: If a price decrease leads to an increase in total revenue, demand must be: A)perfectly inelastic. B)relatively inelastic. C)relatively elastic. D)unit elastic.
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Question

If a price decrease leads to an increase in total revenue, demand must be:
A)​perfectly inelastic.
B)​relatively inelastic.
C)​relatively elastic.
D)​unit elastic.

Quizplus · Accepted Answer

This occurs because the percentage increase in quantity demanded is greater than the percentage decrease in price, indicating relatively elastic demand.

If a Price Decrease Leads to an Increase in Total