Would a Profit-Maximizing Firm Sell Where Demand Is Inelastic

question 62

Multiple Choice

Would a profit-maximizing firm sell where demand is inelastic?

• A)No, this would not follow the rule of MC = MR.
• B)No, the firm could not profitably raise price.
• C)Yes, the firm could profitably lower price to attract sales.
• D)Yes, in this case there are few substitutes for the good.

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Definitions:

Currency

A system of money in general use in a particular country or region, facilitating trade and economic transactions.

Second Currency

An alternate form of currency, sometimes unofficial or digital, used alongside a primary currency within an economy.

Balance Of Payments

A comprehensive record of all economic transactions between the residents of a country and the rest of the world within a specific time period.

Country

A distinct territorial body or political entity that is recognized as an independent nation.