Asked by Khalifa Al Romaithi on Jun 23, 2024
Verified
In which of the following cases will total revenue increase?
A) Price falls and demand is inelastic.
B) Price falls and supply is elastic.
C) Price rises and demand is inelastic.
D) Price rises and demand is elastic.
Total Revenue
The total amount of money generated by the sale of goods or services before any costs are subtracted.
Inelastic
Describes a condition where the demand or supply for a product or service is relatively unresponsive to changes in price.
- Comprehend the impact of price fluctuations on overall revenue in relation to the elasticity of demand.
Verified Answer
DS
Destinee S RobinsonJun 24, 2024
Final Answer :
C
Explanation :
When price rises and demand is inelastic, total revenue increases because the quantity demanded does not decrease proportionally to the increase in price, therefore offsetting the decrease in quantity.
Learning Objectives
- Comprehend the impact of price fluctuations on overall revenue in relation to the elasticity of demand.