Answer:
total revenues would fall
Explanation:
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one. If demand is inelastic, there would be little or no change in the quantity demanded.
Due to the subsidy, there would be an increase in supply.
The increase in supply would lead to excess supply and a fall in price. Since demand is not sensitive to price. there would be no change in demand as a result of the fall in price.
Thus, price would be lower and quantity would remain the same. This would lead to a fall in price.
