If a decrease in price leads to a decrease in total revenue,

A) demand is elastic.
B) demand is inelastic.
C) demand is unit elastic
D) there is not enough information to determine the elasticity of demand.

Question

Wendi Sareee · Accepted Answer

Final Answer : B, Explanation :  When demand is inelastic, a decrease in price leads to a decrease in total revenue because the percentage change in quantity demanded is less than the percentage change in price. This means consumers are not very responsive to price changes, so the decrease in price does not lead to a sufficiently large increase in quantity demanded to offset the lower price, resulting in lower total revenue.

If a decrease in price leads to a decrease in total revenue,

A) demand is elastic.
B) demand is inelastic.
C) demand is unit elastic
D) there is not enough information to determine the elasticity of demand.

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Learning Objectives

Related questions

If a decrease in price leads to a decrease in total revenue,A) demand is elastic.B) demand is inelastic.C) demand is unit elasticD) there is not enough information to determine the elasticity of demand.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a decrease in price leads to a decrease in total revenue,

A) demand is elastic.
B) demand is inelastic.
C) demand is unit elastic
D) there is not enough information to determine the elasticity of demand.