on-a-graph-showing-total-revenue-if-the-area-representing-the-price-effect-is-sm

Question

On a graph showing total revenue, if the area representing the price effect is smaller than the area representing the quantity effect after a price increase, what does this indicate?

Accepted Answer

Total revenue decreases, indicating elastic demand

Answer

Total revenue cannot be determined from the graph

Answer

Total revenue increases, indicating inelastic demand

Answer

Total revenue remains unchanged, indicating unit elastic demand