Multiple Choice
A firm is currently producing in the elastic portion of its demand curve. What course of action do you recommend for it assuming it wants to raise revenue?
A) Continue producing at the current output level, because it maximizes its total revenue by producing in the elastic portion of its demand curve.
B) Reduce price, because if it reduces price and demand is elastic, total revenue will increase.
C) Increase price, because if it increases price and demand is elastic, total revenue will increase.
D) Continue selling at the same price, but increase the amount it produces.
Correct Answer:
Verified
Correct Answer:
Verified
Q67: Demand is more inelastic for an item
Q68: Perfectly inelastic demand is represented as a
Q69: The cross-price elasticity of demand between good
Q70: Refer to the information provided in Figure
Q71: The price elasticity of demand is generally
Q73: Demand determines price entirely when<br>A) demand is
Q74: If an increase in income results in
Q75: Refer to the information provided in Figure
Q76: When demand is unit elastic, a decrease
Q77: If the supply of oranges is unit