question archive If at some price the (linear) demand for a good is elastic, then a decrease in the price of the good will necessarily result in a decrease in the revenue of producers of that good
If at some price the (linear) demand for a good is elastic, then a decrease in the price of the good will necessarily result in a decrease in the revenue of producers of that good
Subject:EconomicsPrice:2.88 Bought3
If at some price the (linear) demand for a good is elastic, then a decrease in the price of the good will necessarily result in a decrease in the revenue of producers of that good.
a. True
b. False
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False
If demand is elastic, when the price decreases, quantity demanded will rise by a greater percentage than the price decreased. Because the decrease in price is less than the increase in the quantity, there will be an increase in revenue.
Therefore, a decrease in price will result in an increase in the total revenue and the statement is False.
