If a firm wishes to raise the revenue of a product with elastic demand, then it should reduce price.

Name: If a firm wishes to raise the revenue of a product with elastic demand, then it should reduce price.
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Question

Quizplus · Accepted Answer

When the demand for a product is elastic, a reduction in price will result in an increase in quantity demanded, leading to an increase in total revenue for the firm. This is due to the fact that the percentage increase in quantity demanded is greater than the percentage decrease in price.

If a Firm Wishes to Raise the Revenue of a Product