passwella.
Menu

WAEC Economics 1988 Question 15

Question 15

Elasticity

When the demand for a commodity is inelastic, total revenue will fall if

  1. A.price is increased
  2. B.price is reduced
  3. C.price remains constant
  4. D.price is not given
  5. E.the commodity is a luxury.
Show the answer and explanation

Answer: B (price is reduced)

Explanation

With inelastic demand, quantity changes proportionately less than price, so cutting the price lowers total revenue.