Answer:
The correct answer is: price elastic; increase.
Step-by-step explanation:
The price elasticity of demand for apples is 1.2.
This implies that the demand relatively prices elastic.
Elastic demand means that a proportionate change in the price of apples will cause more than proportionate change in the quantity demanded.
A decrease in the price of apples will cause its quantity demanded to increase by more than proportionate. This will cause total revenue to increase.