Suppose you are in charge of setting prices at a local sandwich shop.The business needs to increase its total revenue,and your job is on the line.If the demand for sandwiches is elastic,you
A) should increase the price of sandwiches.
B) should decrease the price of sandwiches.
C) should not change the price of sandwiches.
D) could not determine what to do with price until you determine whether supply is elastic or inelastic.

Question

Quizplus · Accepted Answer

If the demand for sandwiches is elastic, decreasing the price of sandwiches will lead to an increase in total revenue. This is because the decrease in price will cause a larger increase in the quantity demanded, resulting in more overall revenue. Therefore, to increase total revenue and avoid job loss, the best option is to decrease the price of sandwiches.

Suppose You Are in Charge of Setting Prices at a Local