Suppose That the Price of a Good Is $10 and Quantity

Multiple Choice

Suppose that the price of a good is $10 and quantity demanded is 50 units. When price increases to $12, quantity demanded decreases to 40 units. What happened to total revenue and what does this indicate?

A) Total revenue decreased from $500 to $480, indicating that demand is inelastic.
B) Total revenue decreased from $500 to $480, indicating that demand is elastic.
C) Total revenue increased from $480 to $500, indicating that demand is inelastic.
D) Total revenue increased from $480 to $500, indicating that demand is elastic.