If a Firm Wants to Increase Revenue, It Should Decrease

question 83

Multiple Choice

If a firm wants to increase revenue, it should decrease the selling price of its product if it is currently producing in the ________ portion of its demand curve.

• A) elastic
• B) inelastic
• C) unit elastic
• D) perfectly inelastic

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, employee wages, and insurance fees.

Market Price

The current price at which an asset or service can be bought or sold.

Average Costs

The cost per unit is found by dividing the overall production cost by the quantity of units produced.

Market Price

The current price at which an asset or service can be bought or sold in the market.