A Price Cut Will Increase the Revenue a Firm Receives

question 224

Multiple Choice

A price cut will increase the revenue a firm receives if the demand for its product is

• A)elastic.
• B)inelastic.
• C)unit elastic.
• D)straight elastic.

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Definitions:

Cartel Arrangements

Agreements among competing firms to control prices, limit production, or divide markets, often to increase profits at the expense of consumers.

Secret Price Reductions

The practice of offering discounts or lower prices to select customers or within certain channels without publicizing these reductions broadly.

Oligopolistic Market

A market structure characterized by a small number of firms that have significant control over market prices and competition.

Increase Sales

An objective of businesses aimed at growing the number of products sold or services rendered.