When demand is elastic, an increase in price will lead to an increase in profits.

Name: When demand is elastic, an increase in price will lead to an increase in profits.
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Question

Quizplus · Accepted Answer

When demand is elastic, an increase in price will lead to a decrease in quantity demanded. As a result, the total revenue (price x quantity) may decline, leading to a decrease in profits. Therefore, an increase in price may not necessarily lead to an increase in profits when demand is elastic.

When Demand Is Elastic, an Increase in Price Will Lead