Question: Consider a product with inelastic demand. Why does an increase in price lead to an increase in total revenue? 1) Because a 1% increase in

Consider a product with inelastic demand. Why does an increase in price lead to an increase in total revenue?

1) Because a 1% increase in price will lead to an increase in quantity demanded of larger than 1%.

2) Because a 1% increase in price will lead to an increase in quantity demanded of smaller than 1%.

3) Because a 1% increase in price will lead to a decrease in quantity demanded of larger than 1%.

4) Because a 1% increase in price will lead to a decrease in quantity demanded of smaller than 1%.

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