To Maximize Its Revenue

question 331

Multiple Choice

To maximize its revenue

• A) a firm facing inelastic demand should always raise its price.
• B) a firm facing elastic demand should always raise its price.
• C) a firm should always charge the highest price possible regardless of the elasticity of demand.
• D) None of the above answers is correct.

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Definitions:

CPI

The Consumer Price Index is a gauge that determines the composite weighted pricing of various consumer products and services, which encompass medical care, food, and transportation.

Base Year

A specific year against which economic or financial data is compared to measure economic performance or inflation.

Ratio

A quantitative relationship between two numbers, showing how many times one value contains or is contained in the other.

Equivalent Ratio

A proportion showing the equality between two ratios or fractions.