Multiple Choice
The producer of good X is contemplating a price change and has asked for your advice. After some empirical investigation, you conclude that the price elasticity of demand for good X is 0.75. Your best advice to the producer would be to
A) increase the price of good X to raise total revenue.
B) decrease the price of good X to raise total revenue.
C) leave the price of good X unchanged since it will not influence total revenue.
D) increase the price of good X to reduce total revenue.
Correct Answer:
Verified
Correct Answer:
Verified
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