You own a small store.Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue.The cashier thinks the price elasticity of demand is ________ and the customer believes the price elasticity of demand is ________.
A) inelastic; elastic
B) elastic; inelastic
C) elastic; elastic
D) inelastic; inelastic
E) unit elastic; elastic

Question

Quizplus · Accepted Answer

The cashier believes the price elasticity of demand is inelastic, meaning that a price increase will lead to a smaller percentage decrease in quantity demanded, potentially increasing total revenue. The customer believes the price elasticity of demand is elastic, meaning that a price decrease will lead to a larger percentage increase in quantity demanded, potentially increasing total revenue.

You Own a Small Store