Which of the following is correct? A.If demand is elastic, an increase in price

Question

Which of the following is correct? A.If demand is elastic, an increase in price will increasetotal revenue. B.If demand is elastic, a decrease in price will decreasetotal revenue. C.If demand is elastic, a decrease in price will increasetotal revenue. D.If demand is inelastic, an increase in price will decreasetotal revenue. Which of the following is correct? A.If demand is elastic, an increase in price will increasetotal revenue. B.If demand is elastic, a decrease in price will decreasetotal revenue. C.If demand is elastic, a decrease in price will increasetotal revenue. D.If demand is inelastic, an increase in price will decreasetotal revenue.

Explanation / Answer

Answer is C, It is true, if demand is elastic, a decrease in price will increase total revenue. In other words, total revenue will increase if price decreases because you will sell more goods.

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