If total revenue goes up when the price falls,demand is said to:

A) be price-inelastic.
B) be price unit-elastic.
C) be price-elastic.
D) have positive price elasticity.

Question

If total revenue goes up when the price falls,demand is said to:A) be price-inelastic.B) be price unit-elastic.C) be price-elastic.D) have positive price elasticity.

Sabrinna Spuzak · Accepted Answer

Final Answer : C, Explanation :  When total revenue goes up as the price falls, demand is said to be price-elastic. This means that a small change in price leads to a relatively larger change in quantity demanded, resulting in an increase in total revenue. If demand is price-inelastic, a decrease in price would lead to a relatively smaller increase in quantity demanded and may even result in a decrease in total revenue. If demand is price unit-elastic, a decrease in price leads to an equal percentage increase in quantity demanded, resulting in no change in total revenue. If demand has positive price elasticity, it simply means that a change in price leads to a change in quantity demanded, without specifying whether it is an increase or decrease in total revenue.

If total revenue goes up when the price falls,demand is said to:

A) be price-inelastic.
B) be price unit-elastic.
C) be price-elastic.
D) have positive price elasticity.

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Learning Objectives

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