How does an acid-base indicator react when placed in an acidic solution?

It depends on the indicator, and the pH range over which it will experience a colour change. Some indicators will change colour in an acidic solution, others will not. For example, blue litmus paper will turn red in an acidic solution, but red litmus paper will not change colour. The test would be inconclusive with red litmus paper, since it does not change colour in an acid and in a neutral solution.