Q1. Briefly explain how total revenue (TR) will be affected in each of the following cases (use the TR formula):
(a) Demand is perfectly inelastic (Ed=0) and price increases
(b) Demand is inelastic and price decreases
Q2. "If a good is price inelastic, then increasing the good's price will result in a decrease in total revenue."
Is the above statement true or false? Explain.
Q3. "If a good is price inelastic, then increasing the good's price will result in a decrease in total revenue."
Is the above statement true or false? Explain.