Economics · Business Economics
Which one of the following relationships regarding the price elasticity coefficient (e) with changes in price and change in total revenue is incorrect?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1When e < 1, an increase in price leads to an increase in total revenue, and a decrease in price leads to a decrease in total revenue
- 2When e = 1, an increase or decrease in price leads to no change in total revenue
- 3When e > 1, an increase in price leads to an increase in total revenue, and a decrease in price leads to a decrease in total revenue✓
- 4When e = 0, an increase or decrease in price leads to a proportional increase or decrease in total revenue
Correct answer
When e > 1, an increase in price leads to an increase in total revenue, and a decrease in price leads to a decrease in total revenue
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