Jean produces leather handbags. If the demand for leather handbags is inelastic and Jean wishes to increase her total revenue, she should:

Question

Quizplus · Accepted Answer

If the demand for leather handbags is inelastic, a price increase will lead to a proportionally larger increase in total revenue. This is because although the price has gone up, the quantity of demand has not decreased significantly. Therefore, to increase total revenue, Jean should increase the price of the handbags.

Jean Produces Leather Handbags