High-Time, Inc. manufactures low price plastic wrist watches. High-Time is considering lowering the price of its watches from the current $8 per unit to $7 per unit. High-Time currently sells 20,000 units per month. The firm's marketing department estimates the price elasticity of demand to be -3 over this price range.
a. If High-Time lowers the price, will the total revenue increase, decrease or remain unchanged? Why?
b. If High-Time lowers the price, what will be the new level of quantity demanded? Of new total revenue?

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The Answer of High-Time, Inc. manufactures low price plastic wrist watches. High-Time is considering lowering the price of its watches from the current $8 per unit to $7 per unit. High-Time currently sells 20,000 units per month. The firm's marketing department estimates the price elasticity of demand to be -3 over this price range.
a. If High-Time lowers the price, will the total revenue increase, decrease or remain unchanged? Why?
b. If High-Time lowers the price, what will be the new level of quantity demanded? Of new total revenue?