For a “decline in price”, total revenue declines if the demand of the product is
When demand is price inelastic (elasticity less than one), quantity demanded rises proportionately less than the fall in price, so price and total revenue move in the same…
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For a “decline in price”, total revenue declines if the demand of the product is
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When demand is price inelastic (elasticity less than one), quantity demanded rises proportionately less than the fall in price, so price and total revenue move in the same direction and a price cut reduces total revenue. With elastic or perfectly elastic demand a price cut raises total revenue, and with unitary elastic demand total revenue stays unchanged.
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UGC NET Commerce