A profit-maximizing price rises to the point at which further increases will cause disproportionate decreases in the number of units sold.

Question

Quizplus · Accepted Answer

This statement is true because as the price increases, the demand for the product decreases, resulting in fewer units sold. Eventually, there is a point where the increase in price causes a significant decrease in demand, leading to a decrease in total revenue and overall profitability. Therefore, a profit-maximizing price is reached when further price increases will cause disproportionate decreases in the number of units sold.

A Profit-Maximizing Price Rises to the Point at Which Further