Suppose Sandy's Candies wants to increase its total revenues. If Sandy increases the price of her candy, she must be assuming that the demand for candy is
A) unit elastic.
B) inelastic.
C) elastic.
D) income elastic.

Question

Quizplus · Accepted Answer

If Sandy increases the price of her candy and expects total revenues to increase, she must be assuming that the demand for candy is inelastic. This means that the percentage decrease in quantity demanded will be less than the percentage increase in price, leading to an increase in total revenue.

Suppose Sandy's Candies Wants to Increase Its Total Revenues