Asked by shivangi thakur on Jul 17, 2024
Verified
When demand is elastic, an increase in price will result in a decrease in total revenue.
Demand Is Elastic
A situation where the quantity demanded of a product changes significantly with a change in its price.
Total Revenue
The overall amount of money earned by a firm from the sale of its products or services before any costs are subtracted.
- Comprehend the correlation between demand elasticity and total revenue.
- Utilize the principle of elasticity to assess how variations in price influence overall revenue.
Verified Answer
GT
gavin thompsonJul 18, 2024
Final Answer :
True
Explanation :
When demand is elastic, consumers are more sensitive to price changes, so an increase in price leads to a proportionally larger decrease in quantity demanded, reducing total revenue.
Learning Objectives
- Comprehend the correlation between demand elasticity and total revenue.
- Utilize the principle of elasticity to assess how variations in price influence overall revenue.
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