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half of any linear demand curve, so total revenue moves in the direction of
the quantity change.
Figure 5.3 Changes in Total Revenue and a Linear Demand Curve

Moving from point A to point B implies a reduction in price and an
increase in the quantity demanded. Demand is elastic between these
two points. Total revenue, shown by the areas of the rectangles drawn
from points A and B to the origin, rises. When we move from point E to
point F, which is in the inelastic region of the demand curve, total
revenue falls.
A movement from point E to point F also shows a reduction in price and an
increase in quantity demanded. This time, however, we are in an inelastic
region of the demand curve. Total revenue now moves in the direction of
the price change—it falls. Notice that the rectangle drawn from point F is
smaller in area than the rectangle drawn from point E, once again
confirming our earlier calculation.

Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

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