Question

Which of the following occurs when price is inelastic?

A) Price and revenue change in the same direction.
B) Revenues decrease when price increases.
C) Revenue is unaffected by price changes.
D) Quantity demanded increases when price increases.
E) The demand curve is more horizontal.

Answer 1

When price is inelastic, revenue is unaffected by price changes.

Step-by-step explanation:

When price is inelastic, the correct option is C) Revenue is unaffected by price changes. Inelastic demand means that quantity demanded is not very responsive to changes in price. Therefore, when the price increases, revenue will also increase because the decrease in quantity demanded is not significant enough to offset the price increase.