Question

If a firm sells a product that falls in the elastic range of the demand curve, then, if price doubles, it can be expected that:

  

total revenue will remain unchanged.

  

demand will decrease.

  

total revenue will decrease

total revenue will double.

  

demand will increase.

Answer 1

From the given statement, the demand is elastic in nature

An Elastic demand is that type of demand in which even there is small change in the price can causes heavy change in the quantity demanded

So when the demand is elastic then price and revenue will move in opposite direction that is if price increases then revenue will decrease and vice versa

So here prices are doubled which means the revenue will decrease

Hence the answer is total revenue will decrease