Question

If a firm raised its pricea and discovered that its toatl revenue fell, then the demand for its product is:______.

a. relatively inelastic.
b. perfectly inelastic.
c. income inferior.
d. relatively elastic.

Answer 1

Option d (Relatively elastic) would be the correct solution.

Step-by-step explanation:

• The demand for some of its commodities becomes relatively elastic, i.e. the price drop contributed to a large decrease or change in the number requested, thus lowering the overall sales.
• It could be contrasted to other options for elasticity-comparatively inelastic, completely inelastic, perfectly elastic even elastic units.

All 3 other options are not connected to the hypothetical offered. So, the option here was the best one.