If a Revenue-Maximizing Firm Is Told That the Price Elasticity

question 193

Multiple Choice

If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:

• A) raise prices 1 percent.
• B) lower prices 1 percent.
• C) raise prices until the elasticity becomes very high.
• D) keep the price where it is.
• E) lower prices until the elasticity becomes very high.

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Definitions:

Inconsistencies

Describes situations where there is a lack of alignment or congruence between elements or behaviors within an organization.

Project

A planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Cheerfulness

A state of being noticeably happy and optimistic.

Contentment

A state of happiness and satisfaction.