Suppose that at the price dollars the demand for a product is inelastic. If the price is increased, what will happen to revenue?
A) increase
B) decrease
C) stay the same

Question

Suppose that at the price  dollars the demand for a product is inelastic. If the price is increased, what will happen to revenue?
A) increase 
B) decrease 
C) stay the same

Quizplus · Accepted Answer

Since the demand for the product is inelastic at 11 dollars, an increase in price will lead to a proportionally smaller decrease in quantity demanded. As a result, total revenue will decrease, following the law of demand. Therefore, the best choice is B, decrease.

Suppose That at the Price Dollars the Demand for a Product