Say you own a kiosk where you sell T-shirts to other students. After conducting a quick survey you find that at the current price the price elasticity of demand for your T-shirts is inelastic. Knowing this, if you wanted to increase the total revenue from selling T-shirts you should

Question

Quizplus · Accepted Answer

Since the price elasticity of demand is inelastic, increasing the price of the T-shirts will result in an increase in total revenue. In other words, even though there will be a decrease in the quantity demanded, the increase in price will more than offset the loss in sales volume so that overall revenue will rise.

Say You Own a Kiosk Where You Sell T-Shirts to Other