To maximise its revenue,
A) a firm facing elastic demand should always raise its price.
B) a firm should always charge the highest price possible regardless of the elasticity of demand.
C) a firm facing inelastic demand should always raise its price.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are less sensitive to price changes, meaning a firm can raise prices without a significant drop in quantity sold, potentially increasing revenue.

To Maximise Its Revenue