Suppose That ABC Beer Brewer Faces a Linear Demand Curve

question 46

Multiple Choice

Suppose that ABC Beer Brewer faces a linear demand curve and that the current price for its beer is set at a point where the price elasticity is 1.6. If ABC Beer Brewer increases the product price

• A) the demand becomes more elastic and total revenue increases.
• B) the demand becomes less elastic and total revenue increases.
• C) the demand becomes more elastic and total revenue decreases.
• D) the demand becomes less elastic and total revenue decreases.

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