If demand is inelastic, a change in the price
If demand is inelastic, a change in the price
A). Will change the quantity in same direction
B). Will change total revenue in same direction
C). Will change total revenue in the opposite direction
D). Will not change total revenue
1 answers
Will change total revenue in same direction
If demand is inelastic, a change in the price will change total revenue in same direction. When demand is price inelastic, a given percentage change in price results in a smaller percentage change in quantity demanded. That implies that total revenue will move in the direction of the price change: an increase in price will increase total revenue, and a reduction in price will reduce it.
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