Total revenue falls as the price of a good increases if price elasticity of demand is?

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1185921

2026-03-17 04:05

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Total revenue falls as the price of a good increases if the price elasticity of demand is greater than one, meaning the demand is elastic. In this scenario, consumers are sensitive to price changes, and an increase in price leads to a proportionally larger decrease in the quantity demanded. Consequently, the overall revenue generated from sales declines. Conversely, if demand is inelastic (less than one), total revenue would increase with a price rise.

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