If demand is inelastic, an increase in price leads to increased revenue, even though quantity sold will fall. This is because the reduction in sales will be smaller, in percentage terms, than the increase in price (the definition of inelastic demand).

   In the same way, if price is reduced revenue will fall. Even though sales will increase due to the reduced price, because demand is inelastic the percentage increase in sales will be smaller than the percentage reduction in price.

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