Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 4 - Elasticity - Questions - Page 90: 6a

Answer

Total revenue would decrease.

Work Step by Step

Since demand is inelastic, a decrease in price would result in a less than proportionate change in quantity demanded, thus, the area of (P x Q) (which is total revenue) that is lost would be greater than the area gained. Total revenue would therefore decrease.
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