Which of the following instances will total revenue or receipts decline? Group of answer choices Price falls and demand is elastic. Price falls and demand is unit elastic. Price rises and demand is elastic. Price rises and demand is inelastic.

Price rises and demand is elastic

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.

Demand is inelastic if a small change in price has little or no effect on quantity demanded.

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.

If Price falls and demand is elastic, total revenue would increase because Quanitity demanded would rise.

If Price falls and demand is unit elastic, there would be a proportionate change in quantity demanded and total revenue would remain unchanged.

If Price rises and demand is elastic, total revenue would fall because Quanitity demanded would fall.

If Price rises and demand is inelastic, total revenue would rise because there would be no change in quantity demanded