ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -That implies that total revenue will move in the direction of the price change: an increase in price will increase total revenue, and a reduction in price will reduce it. Demand is unit price elastic, and total revenue remains unchanged. Quantity demanded falls by the same percentage by which price increases.

Detailed explanation-2: -b) If demand is price elastic, then decreasing price will increase revenue.

Detailed explanation-3: -When demand is elastic (price elasticity ), price and total revenue have a negative relationship, meaning that price rises lead to lower total revenue.

Detailed explanation-4: -A good is perfectly elastic if the price elasticity is infinite (if demand changes substantially even with minimal price change). If price elasticity is greater than 1, the good is elastic; if less than 1, it is inelastic.

Detailed explanation-5: -If the price for an inelastic good is lowered, the demand for that good does not increase, resulting in less overall revenue due to the lower price and no change in demand. This would indicate that the firm should not reduce the price of its goods as there is no beneficial outcome in doing so.