Suppose that over one range of? prices, the absolute value of the price elasticity of demand varies from 15.0 to? 2.5, and over another range of? prices, the absolute value of the price elasticity of demand varies from 1.5 to 0.75. What can you say about total revenue and the total revenue curve over these two ranges of the demand curve as price? falls?
A. In the first case total revenue falls and in the second case total revenue falls.
B. In the first case total revenue rises and in the second case total revenue rises.
C. In the first case total revenue falls and in the second case total revenue falls and then rises.
D. In the first case total revenue rises and in the second case total revenue rises and then falls.
E. There is insufficient information to determine the effect on total revenue.
Answer: C. In the first case total revenue falls and in the second case total revenue falls and then rises.
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