Question

For inelastic demand curves, total revenue move is the __________ direction as the price; for elastic...

For inelastic demand curves, total revenue move is the __________ direction as the price; for elastic demand curves, total revenue moves in the __________ direction as the price.
A. Opposite; same.
B. Same; opposite.
C. Same; same.
D. Opposite; opposite.
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Answer #1

Solution: same; opposite

Explanation: An elastic demand leads to an increase in the price leads to a decrease in quantity demanded and an decrease in total revenue. An inelastic demand leads to increase in the price leads to a decrease in quantity demanded and an increase in total revenue. When the demand is elastic. price and total revenue move in opposite directions; when demand is inelastic, price and total revenue move in the same direction; when demand is unit elastic total revenue remains constant when the price changes

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