If the demand for donuts is elastic, then a decrease in the price of donuts will a. not change total revenue of donut sellers. b. increase total revenue of donut sellers. c. There is not enough information to answer this question. d. decrease total revenue of donut sellers.

B

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes

If demand is elastic and price is decreased, the quantity demanded would increase more than the change in price. As a result, revenue would increase

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