To increase total revenue,firms with ______ demand should lower price and firms with ______ demand should increase price.

Question

Quizplus · Accepted Answer

Firms with elastic demand should lower prices because the percentage increase in quantity demanded will be greater than the percentage decrease in price, leading to higher total revenue. Conversely, firms with inelastic demand should increase prices because the percentage decrease in quantity demanded will be less than the percentage increase in price, also leading to higher total revenue.

To Increase Total Revenue,firms with ______ Demand Should Lower Price