UGC NET COMMERCE July 2018 Q16
| Price elasticity coefficient | Change in price | Change in Total Revenue | |
| A | Zero | Increase Decrease | Increase Decrease |
| B | Less than 1 | Increase Decrease | Decrease Increase |
| C | Equal to 1 | Increase Decrease | No change No change |
| D | More than 1 | Increase Decrease | Decrease Increase |
- Option : B
- Explanation : Relationship between Price Elasticity and Total Revenue: Total revenue from the sale of a good is equal to the price times the quantity. Price elasticity is an important concept because if demand is elastic and increase in sales price results in a decrease in total revenue for all producers. If demand is unitary total revenue remains the same if price changes, and total revenue increases if price is increased when demand is inelastic. These relationships are shown in the following table:
