An economist estimates that 0.67 is the price elasticity of demand for disposable diapers. This suggests that disposable diaper producers could:
A) advertise more to raise the price elasticity of demand.
B) encourage more parents to use cloth diapers.
C) lower the price of disposable diapers to raise more revenue.
D) raise the price of disposable diapers to raise more revenue.

Question

Quizplus · Accepted Answer

Since the price elasticity of demand is less than 1 (inelastic), raising the price will lead to an increase in total revenue.

An Economist Estimates That 0