A decrease in price will result in an increase in total revenue if.

The percentage change in quantity demanded in less than the percentage change in price

No worries! We‘ve got your back. Try BYJU‘S free classes today!

The percentage change in quantity demanded is greater than the percentage change in price

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Demand is inelastic

No worries! We‘ve got your back. Try BYJU‘S free classes today!

The consumer is operating along a linear demand curve at a point at which the price is very low and the quantity demanded is very high

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B The percentage change in quantity demanded is greater than the percentage change in price
A decrease in price result in an increase in total revenue(total expenditure), indicates inverse relation so demand will be elastic $(E > 1)$ as per total outlay method and also $E > 1$ will be happened under $%$ method when $% Δ Q > % Δ P$ .

Suggest Corrections

Similar questions

Q. According to percentage method or arithmetic method of elasticity of demand, If percentage change in quantity demanded is less than percentage change in price, the elasticity is said to be ________________.

Q. When percentage change in quantity demanded is equal to the percentage change in price, the elasticity of demand is __________.

What is the situation implies in the case where the demand is greater than unitary elastic when percentage change in quantity demanded in response to change in price of the commodity?

Which of the following is the measurement of percentage change in quantity demanded due to a percentage change in the price of a good?

Elasticity of demand, measured by comparing the ratio of percentage change in the quantity demanded to the percentage change in the price of a commodity, is known as

Join BYJU'S Learning Program