Question

Looking at the relationship between elasticity and total revenue, we can say that

a. When demand is unit elastic, small price changes don’t change total revenue
b. When a good is price inelastic, revenue increases as price increases
c. When a good is price elastic, revenue decreases as price increases
d. All of the above
e. None of the above

Answer 1

Looking at the relationship between elasticity and total revenue, we can say that the option that is right to chose is

e. None of the above

Step-by-step explanation:

Relationship between elasticity of the product revenue and the good price is so that there are a lot of variables to determine its effect on the total revenue of that said product.

This can be the demand supply change as well as the demand cost and the production cost of the production that must be taken into account before we begin to find a relation between their elasticity.

This makes them more vulnerable to change and thus leaves little chance to determine a relation,