The Producer of Good X Is Contemplating a Price Change

question 161

Multiple Choice

The producer of good X is contemplating a price change and has asked for your advice. After some empirical investigation, you conclude that the price elasticity of demand for good X is 0.75. Your best advice to the producer would be to

• A)increase the price of good X to raise total revenue.
• B)decrease the price of good X to raise total revenue.
• C)leave the price of good X unchanged since it will not influence total revenue.
• D)increase the price of good X to reduce total revenue.

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Definitions:

Short-term Note Payable

A debt obligation due within one year or less, often used for short-term financing needs or working capital requirements.