KFC raises the price of its grilled chicken.The price elasticity of demand for KFC grilled chicken is 0.8.What happens to the KFC's total revenue?
A) nothing
B) It increases.
C) It decreases.
D) It becomes negative.
E) It might change, but more information is needed to determine if it increases, decreases, or does not change.

Question

Quizplus · Accepted Answer

Since the price elasticity of demand for KFC grilled chicken is less than 1 (inelastic), an increase in price will lead to a smaller percentage decrease in quantity demanded, thus increasing total revenue.

KFC Raises the Price of Its Grilled Chicken