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Assume the Demand Function for SeatComfy's Table Chairs Is as Given

Question 1

Multiple Choice

Assume the demand function for SeatComfy's table chairs is as given in the previous question (Q = 5,000 - 25P + 4I +10PA - 15PT) . Moreover, assume that currently P = 10, PA = 15, I = 500, PT = 100. Which of the following is true?


A) If SeatComfy increases its price by 1%, sales will increase as well as total revenues.
B) If SeatComfy decreases its price by 1%, sales will increase, while total revenues will decrease.
C) If SeatComfy increases its price by 1%, sales will decrease, while total revenues will increase.
D) If SeatComfy increases its price by 1%, sales will decrease as well as total revenues.

Correct Answer:

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