If the price of a commodity with elastic demand increases, the revenue accruing to the producer will
- double
- increase
- be constant
-
decrease
The correct answer is: D
Explanation
If the demand for a good is elastic, the producer revenue will reduce. This is because, when there is an increase in price it will lead to a decrease in the quantity demanded, consumers would most likely move on to consume a substitute, hence the producer of that product would loose revenue as a result of a drop in sales.