Total Revenue Test of PED

If the demand for a good is price elastic and the price falls, then the total revenues of producers will increase (as consumers are highly responsive to the lower price so the % increase in Qd will exceed the % decrease in price).

If the demand for a good is price inelastic and the price falls, then total revenues will fall.

If the demand for a good is price elastic and the price rises, then total revenues will fall.

If the demand for a good is price inelastic and the price rises, then total revenues will rise.

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