To increase total revenue, firms with ________ demand should lower price, and firms with ________ demand should increase price.
A)elastic; unit
B)elastic; inelastic
C)inelastic; elastic
D)unit; inelastic

Question

Quizplus · Accepted Answer

If demand is elastic, then a fall in price will increase total revenue (since the resulting percentage increase in quantity demanded will be comparatively large), and if demand is inelastic, then an increase in price will increase total revenue (since the resulting fall in quantity demand will be comparatively small).

To Increase Total Revenue, Firms with ________ Demand Should Lower