Suppose That an Italian Ice Cream Firm Is Facing a Linear

question 98

Multiple Choice

Suppose that an Italian ice cream firm is facing a linear demand curve and that the current price for the Italian ice cream is set at a point where the price elasticity is 0.7. If the firm decreases the product price

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

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