Asked by Lonette McMorris on Jul 30, 2024
Verified
When demand is inelastic, a decrease in price will result in an increase in total revenue.
Inelastic Demand
Describes a situation where the demand for a good or service changes little when its price changes.
Total Revenue
The total amount of money generated from the sale of goods or services.
Decrease
A reduction in quantity, size, intensity, or the number of something.
- Investigate the consequences of price fluctuations on aggregate revenue, considering demand elasticity.
Verified Answer
AP
ARCHANA PILLAYJul 31, 2024
Final Answer :
False
Explanation :
When demand is inelastic, a decrease in price will lead to a decrease in total revenue because the percentage change in quantity demanded is less than the percentage change in price.
Learning Objectives
- Investigate the consequences of price fluctuations on aggregate revenue, considering demand elasticity.
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