Suppose the Demand for Milk Is Relatively Inelastic

question 153

Multiple Choice

Suppose the demand for milk is relatively inelastic.What happens to sales revenue if the government imposes a price floor above the free-market equilibrium price in the market for milk?

• A)Sales revenue falls.
• B)Sales revenue rises.
• C)Sales revenue remains unchanged.
• D)It cannot be determined without information on prices.

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