If the demand faced by a firm is elastic,selling one less unit of output will
A)increase revenue.
B)decrease revenue.
C)keep revenues constant.
D)decrease price.

Question

Quizplus · Accepted Answer

If the demand faced by a firm is elastic, it means that the consumers are very sensitive to price changes. Thus, if the firm sells one less unit of output, it will need to reduce its price to maintain its sales. This will result in a decrease in revenue because the price cut will not be sufficient to compensate for the loss of sales.

If the Demand Faced by a Firm Is Elastic,selling One