Multiple Choice
In California, the price elasticity for vanity license plates is .5 and their price is $78. California is:
A) maximizing revenue since elasticity is less than 1 and revenue will increase after a price increase when demand is inelastic.
B) not maximizing revenue since elasticity is less than 1 and revenue will increase after a price increase when demand is inelastic.
C) maximizing revenue since elasticity is less than 1 and revenue will decrease after a price increase when demand is inelastic.
D) not maximizing revenue since elasticity is less than 1 and revenue will decrease after a price increase when demand is inelastic.
Correct Answer:
Verified
Correct Answer:
Verified
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