Other things equal, if a firm finds the demand for one of its products is inelastic, it can INCREASE its total revenues by:
A)reducing fixed costs.
B)reducing variable costs.
C)raising its price.
D)lowering its price.

Question

Quizplus · Accepted Answer

If the demand for a product is inelastic, then a change in price will result in a proportionally smaller change in quantity demanded. Therefore, raising the price will result in an increase in total revenue for the firm.

Other Things Equal, If a Firm Finds the Demand for One