A single producer,whose objective is to raise total revenue,would reduce the price of its product if it is operating in the portion of the demand curve with price elasticity of demand equal to

Question

Quizplus · Accepted Answer

A producer would reduce the price of its product if it is operating in the portion of the demand curve where the price elasticity of demand is greater than 1. This means that a decrease in price would lead to a more than proportionate increase in quantity demanded, resulting in an overall increase in total revenue. Only option E has a price elasticity of demand greater than 1, therefore it is the best choice.

A Single Producer,whose Objective Is to Raise Total Revenue,would Reduce