When demand is price elastic, a fall in price causes total revenue to rise because the percentage drop in price will result in an even larger percentage increase in the quantity,thus increasing total revenue.
Given an incomplete sentence related to the elasticity of demand.
We are required to fill the appropriate reason in the blank.
The price elasticity of demand is basically the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.
Price elasticity of demand=dQ/dP*P/Q
in which P is price and Q is quantity.
When demand is price elastic, a fall in price causes total revenue to rise because the percentage drop in price will result in an even larger percentage increase in the quantity,thus increasing total revenue.
Hence the appropriate reason is the percentage drop in price will result in an even larger percentage increase in the quantity,thus increasing total revenue.
Learn more about elasticity at https://brainly.com/question/5078326
#SPJ4
